Which of the Following Bond Types Has a Payment Schedule

question 33

Multiple Choice

Which of the following bond types has a payment schedule in which the amount of annual principal repayment is scheduled to increase each year by approximately the same amount that interest payments decrease?

• A) Regular.
• B) Deferred.
• C) Annuity.
• D) Irregular.

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Definitions:

Opportunity Cost

The expense of not choosing the second-best option while making a choice.

Machinery

Mechanical devices or assemblies, often powered by electricity or engines, that perform specific tasks, commonly used in industries for production processes.

Petroleum

A natural, flammable liquid found in the Earth's formations, composed of a complex mixture of hydrocarbons and used primarily as fuel.

Opportunity Cost

The value of the best alternative forgone when a decision is made to pursue a particular course of action.