Use the Information for the Question(s)below

question 100

Multiple Choice

Use the information for the question(s) below.
-A corporate bond which receives a BBB rating from Standard and Poor's is considered

• A)a defaulted bond.
• B)an investment grade bond.
• C)a high-yield bond.
• D)a junk bond.

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Definitions:

Lease

A contractual agreement where one party, the lessor, grants the other party, the lessee, the right to use an asset for a specified period in exchange for payment.

Discount Rate

A rate used to determine the present value of future cash flows; in monetary policy, it refers to the interest rate charged to commercial banks for loans from a central bank.

Trust Agreement

A legal document establishing a trust and outlining the rules and guidelines that the trustees must follow in managing the trust assets for the benefit of the beneficiaries.

Present Value

The worth in present terms of a sum of money due in the future or sequences of cash receipts, using a given rate of return for discounting.