When Bonds Are Retired Prior to Their Maturity Date

question 105

Multiple Choice

When bonds are retired prior to their maturity date:

• A)GAAP has been violated.
• B)The issuing company probably will report an ordinary gain or loss.
• C)The issuing company probably will report an extraordinary gain or loss.
• D)The issuing company will report a non-operating gain or loss.

---

Definitions:

Experience Curve Effects

The reduction in unit costs of production as output increases, typically due to gained efficiencies and learning over time.

Regression Analysis

A statistical method used to examine the relationship between a dependent variable and one or more independent variables.

Target Variable

In statistical modeling and machine learning, the variable that is the object of prediction or explanation.

Judgment-Based Forecasting

This method of forecasting relies on expert opinions and intuition rather than statistical data or mathematical models.