Which of the Following Best Illustrates Why a Bond Is

question 52

Multiple Choice

Which of the following best illustrates why a bond is a type of loan?

• A)The issuers of bonds regularly pay interest on the face value of the bond to the buyers of those bonds.
• B)When a company issues a bond,the buyer of that bond becomes a part owner of the issuing company.
• C)Federal and local governments issue bonds to finance long-term projects.
• D)When an investor buys a bond from an issuer,the investor is giving money to the issuer,with the assurance it will be repaid at a date in the future.

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Definitions:

Preliminary Sums

The initial totals computed from a data set, often used in further statistical analysis.

Cross-Products

The product of elements diagonally opposite each other when considering the multiplication of two matrices or arrays, or in vectors, it refers to the vector product of two vectors.

Least-Squares Regression Line

A straight line that minimizes the sum of the squared differences between the observed values and those predicted by the line.

Regression Assumptions

Fundamental conditions that must be met for the results of a regression analysis to be valid, including linearity, independence of errors, homoscedasticity, and normality of residuals.