Asked by Samantha Valadez on May 09, 2024
Verified
Atlas Corporation is in sound financial condition. It sells a long-term bond. Which of the following make the interest rate on this bond lower than otherwise?
A) Both Altas' sound finances and the long term of the bond.
B) Atlas' sound finances but not the long term of the bond.
C) The long term of the bond but not Atlas' sound finances.
D) Neither Atlas' sound finances nor the long term of the bond.
Interest Rate
It refers to the profit or cost of borrowing capital, typically expressed as an annual percentage.
Sound Finances
A term describing a stable and healthy financial condition characterized by manageable levels of debt and efficient budgeting.
Long-Term Bond
A long-term bond is a debt security with a maturity period typically longer than 10 years, offering interest payments over an extended time.
- Describe factors affecting bond interest rates including the issuer's financial condition and term length.
Verified Answer
Learning Objectives
- Describe factors affecting bond interest rates including the issuer's financial condition and term length.
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