Which of the Following Statements Is True in Relation to Secondary

question 29

Multiple Choice

Which of the following statements is true in relation to secondary markets for LDC debt?

• A)LDC loans change hands when one creditor assigns the rights to all future payments and principal payments to a buyer, hence removing it from the balance sheet.
• B)Liquidity in these markets is low, as the country whose debt is traded needs to consent to the transaction.
• C)Prices for LDC debt are negotiated directly between the purchaser and the seller.
• D)LDC loans change hands when one creditor assigns the rights to all future payments and principal payments to a buyer and prices for LDC debt are negotiated directly between the purchaser and the seller.

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Definitions:

Depreciated

The decrease in the value of an asset over time due to wear and tear or obsolescence.

Modified Accelerated Cost Recovery System

A method of depreciation in the U.S. tax code that allows for faster asset depreciation in the early years of the asset's life.

U.S. Federal Income Tax

The financial charge imposed annually by the Internal Revenue Service on the income of individuals, corporations, trusts, and various legal entities.

Depreciating Assets

Assets that lose value over time due to use, wear and tear, or obsolescence, such as machinery, vehicles, and buildings.