Bonds issued by corporations and exposed to default risk are classified as_________?
Correct answer: A. Corporation bonds
- A. Corporation bonds
- B. Default bonds
- C. Risk bonds
- D. Zero risk bonds
Explanation
Bonds issued by companies are called corporate bonds, and unlike government bonds they carry a risk that the issuer may default. “Corporation bonds” is the intended wording of option A.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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