Question

Which of the following is long-term debt instrument that requires t5he issuer to repay the lender in regular interest payments until the loan is repaid on or before the specified maturity rate?
A. A bond
B. Trade credit
C. A Treasury bill
D. Commercial paper
E. A certificate of deposit

Answer 1

Answer:

The answer is option (a) Bond

Explanation:

Solution

A Bond : It refers to as an investment securities where an investor borrows money to an organization or a government for a an amount of time, in exchange for consistent interest payments.

Once the bond approaches maturity, the issuer of the bond returns the investor’s money.

Another term used in describing bonds are fixed income. since your investment gains fixed payments over the life of the bond.