Which of the Following Describes a Serial Bond

question 97

Multiple Choice

Which of the following describes a serial bond?

• A)a bond that repays principal in installments
• B)a bond that gives the bondholder a claim for specific assets if the issuer fails to pay
• C)a bond that matures at one specified time
• D)a bond that is not backed by specific assets

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Definitions:

Market Rate

The prevailing price or interest rate available in the marketplace for goods, services, or securities.

Interest Method

A way of calculating interest where the amount of interest recognized over a period varies and applications could include accounting for bonds or loans.

Straight-Line Amortization

A method of systematically reducing the carrying amount of an intangible asset over its useful life.

Bonds Sold

Refers to bonds that have been issued by an entity and purchased by investors, representing a loan from the investors to the entity.