Listed Below Are Five Terms Followed by a List of Phrases

question 118

Multiple Choice

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term.
-Economic entity assumption

• A)Implies consensus among different observers.
• B)Assumes an entity will continue to operate indefinitely.
• C)Ignores the possibility of inflation.
• D)Assumes all transactions can be identified with a particular entity.
• E)Requires reporting the financial life of an entity in discrete time frames.

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Definitions:

Face Value

The nominal or stated value of a bond, share of stock, or other financial instruments, typically used as a reference for calculating interest, dividends, or premiums.

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) over the bond's life, with the principal amount repaid at maturity.

Market Interest Rates

The prevailing rate of interest available in the marketplace for securities, loans, and deposits, determined by supply and demand dynamics.

Par Value

The face value of a bond or the stock value stated in the corporate charter, which is the nominal value of a security.