Multiple choice

Which of the following features is correct with regard to a bond?

  1. It is issued by a secritisation company, for securitisation purpose

  2. These are issued by the government, only for raising loans

  3. It is a negotiable certificate evidencing indebtedness

  4. All of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Bond is a negotiable certificate evidencing indebtedness, a debt security or IOU, issued by a company, municipality or government agency. A bond investor lends money to the issuer and in exchange, the issuer promises to repay the loan amount on a specified maturity date. The issuer usually pays the bondholder periodic interest payments over the life of the loan.

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