Q568
Type of bond which pays interest payment only when it earns is classified as
A.
income bond
AnswerB.
interest bond
C.
payment bond
D.
earning bond
Answer: Option A
Solution
Answer: Option A
Solution:
Type of bond which pays interest payment only when it earns is classified as income bond. An income bond is a type of debt security in which only the face value of the bond is promised to be paid to the investor, with any coupon payments paid only if the issuing company has enough earnings to pay for the coupon payment.