Asked by Mason Rogers on Apr 27, 2024
Verified
A bond is considered a:
A) real asset
B) fianncial asset
C) debt instrument
D) Both B & C
Debt Instrument
A paper or electronic obligation that enables the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract.
Bond
A fixed income investment in which an investor loans money to an entity (corporate or governmental) which borrows the funds for a defined period at a variable or fixed interest rate.
Financial Asset
An intangible asset that derives value from a contractual right or ownership claim, such as stocks, bonds, or bank deposits.
- Define bonds and understand their role as financial assets and debt instruments.
Verified Answer
ZH
Zachary HarrillApr 29, 2024
Final Answer :
D
Explanation :
A bond is a financial asset that represents a debt instrument. It is issued by a borrower (usually a corporation or government) and purchased by an investor (lender) who is paid periodic interest payments and the return of the principal amount at maturity. Therefore, both options B and C are correct.
Learning Objectives
- Define bonds and understand their role as financial assets and debt instruments.