Which of the Following Is Not True Regarding Zero-Coupon Bonds

question 12

Multiple Choice

Which of the following is not true regarding zero-coupon bonds?

• A)They are issued at a deep discount from par value.
• B)Investors are taxed annually on the amount of interest earned, even though the interest will not be received until maturity.
• C)The issuing firm is permitted to deduct the amortized discount as interest expense for federal income tax purposes, even though it does not pay interest.
• D)Zero-coupon bonds are purchased mainly for tax-exempt investment account, such as pension funds and individual retirement accounts.
• E)all of the above are true

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Definitions:

Anomie

A condition of society in which there is a breakdown of social norms and values, leading to a state of normlessness.

Cultural Standards

Norms and values that are widely held and practiced by a culture, guiding behavior and social expectations.

Structural Means

The arrangements or mechanisms within a society that facilitate the accomplishment of societal norms, goals, or purposes.

Structural Inequality

Describes systemic disparities in access to resources, opportunities, and rights that are embedded within the social, political, and economic structures of a society.