Which of the Following Is True About Bonds

question 6

Multiple Choice

Which of the following is true about bonds?

• A) They are obligations from the investor to the corporation.
• B) Their interest rate always varies with the Consumer Price Index
• C) They have a fixed maturity, and they pay an amount equal to the maturity value times the coupon rate each year.
• D) At maturity of the bond, the investor receives the market price of the bond.

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Definitions:

Negative Cumulative Cash Surplus

A financial situation where the cumulative cash flows from a project or business are negative, indicating a deficit.

Borrowing Need

The necessity for an individual or organization to raise funds through loans or debt issuance to finance its operations or investments.

Costs Of Placing An Order

Expenses associated with ordering inventory, including administrative costs, shipping, handling, and procurement costs, critical in managing inventory levels.

Shortage Cost

Costs incurred from not having enough inventory or resources to meet demand, including lost sales and dissatisfied customers.