Which of the Following Best Illustrates Why a Bond Is

question 23

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.
• E)Bonds are typically bought by banks,so the source of funds is the same.

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Definitions:

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