The coupon payment accrued between last payment and settlement date is classified as __________?
Correct answer: D. accrued interest
- A. paid interest
- B. unpaid interest
- C. zero interest
- D. accrued interest
Explanation
Coupon interest earned from the last payment date up to the settlement date is called accrued interest. The buyer normally pays this accrued amount to the seller at settlement.
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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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