PLEASE EXPLAIN YOUR ANSWER. I NEED A GOOD GRADE AND UNDERSTANDING. THANK YOU!! 1

Question

PLEASE EXPLAIN YOUR ANSWER. I NEED A GOOD GRADE AND UNDERSTANDING. THANK YOU!!

1. The _____ of a bond is the guaranteed percentage of face value that the company will pay to the bond owner every year.

a) penalty rate
b) discount rate
c) dividend yield
d) annuity
e) coupon rate

2. Which of the following is true of commercial certificates of deposit?

a) They are long-term securities.
b) They are issued by the U.S. government.
c) They are available in minimum amounts of $1,000.
d) They may be traded prior to maturity.
e) They carry higher inherent risks.

3. A bond issue creates _____ for the issuing company.

a) retained earnings
b) equity
c) a current asset
d) a long-term liability
e) a fixed asset

Explanation / Answer

1) D

3) D

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