If the bonds are used as an investment vehicle by the investors of institutions then the bond must be ___________?
Correct answer: C. rated
- A. automated
- B. discounted
- C. rated
- D. stocked
Explanation
Institutional investors generally require bonds to be rated so that the issuer’s credit risk and default probability can be assessed. Rating is more relevant here than whether the bond is discounted or electronically processed.
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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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