Which of the Following Statements Is True

question 107

Multiple Choice

Which of the following statements is true?

• A) A bond that has a rating of AA is considered to be a junk bond.
• B) A bond will sell at a premium if the prevailing required rate of return is less than the bond's coupon rate.
• C) A zero coupon is a bond that is secured by a lien on real property.
• D) The legal document that describes all of the terms and conditions of a bond issue is called a debenture agreement.

---

Definitions:

Scattergraph Method

A statistical tool used to plot data points on a graph to identify potential trends, often used in cost accounting to analyze variable costs against a level of activity.

Cost Behaviours

Describes how different types of costs change or remain constant with variations in business operations' volume or scale.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.

Variable Selling Expenses

Expenditures that change in direct correlation with the amount of sales, like commission fees and delivery costs.