Q538
Bonds issued by corporations and exposed to default risk are classified as
A.
corporation bonds
AnswerB.
default bonds
C.
risk bonds
D.
zero risk bonds
Answer: Option A
Solution
Answer: Option A
Solution:
Bonds issued by corporations and exposed to default risk are classified as corporation bonds. A corporate bond is a debt security issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. In some cases, the company's physical assets may be used as collateral for bonds.