Question

A bond is aa.financial intermediary. b.certificate of indebtedness. c.certificate of partial ownership in an enterprise. d.None of the above is correct.

Answer 1

A bond is a certificate of indebtedness.

Explanation:

A bond is a fixed income asset reflecting a loan to a borrower made by an investor. A relationship between the lender and the borrower which includes the details of the loan and its payments could be considered as an I.O.U.

A certificate of indebtedness is a negotiable instrument for the short term as evidence of a floating debt. A certificate of indebtedness was more of a government I.O.U., promising holders of certificates with a set coupon to return their funds.

CDs, bond certificates, promissory notes, etc. are all modern forms of certificates of indebtedness.