The Following Financial Information Was Summarized from the Accounting Records

question 82

Multiple Choice

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: The net income for Train Corporation is:

• A) $83,180
• B) $35,940
• C) $48,390
• D) $60,840

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

Yield to Maturity

The anticipated full income on a bond, provided it is held through to its expiration date.

Interest Rate Risk

The risk of losing money on investments because of changes in interest rates.