1. Which of the following best illustrates why a bond is a type of loan?
A. Funds raised are used to finance longminus term projects.
B. When a company issues a? bond, the buyer of that bond becomes an owner of the issuing company.
C. The issuers of bonds make regular payments to bondholders.
D. When an investor buys a bond from an? issuer, the investor is giving money to the? issuer, with the assurance that it will be repaid at a date in the future.
2. Which of the following statements regarding bonds and their terms is FALSE?
A. Bonds typically make two types of payments to their holders.
B. By? convention, the coupon rate is expressed as an effective annual rate.
C. The time remaining until the repayment date is known as the term of the bond.
D. Bonds are securities sold by governments and corporations to raise money from investors today in exchange for a promised future payment.