Type of bonds that pays no coupon payment but provides little appreciation are classified as______________?
Correct answer: C. Zero coupon bond
- A. Depreciated bond
- B. Interest bond
- C. Zero coupon bond
- D. Appreciation bond
Explanation
A zero-coupon bond makes no periodic coupon payments and is normally issued below face value, with the investor's return coming from its appreciation to par at maturity. The other labels are not standard bond classifications.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
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.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
Reinvestment risk of bonds is higher on__________?
In large expansion programs, increased riskiness and flotation cost associated with project can cause_______________?
Cash outflows are costs of project and are represented by___________?
Coupon rate of bond is also called____________?
An increasing in interest rate leads to decline in value of__________?
Bonds issued by government and backed by Pak government are classified as_________?