Question

Which statement describes the way war bonds raised money?

Answer 1

Answer C The government paid a cash loan to the buyer; the buyer paid back the loan plus interest.

Answer 2

The correct answer is A.

War bonds are debt-securities issued by goverments that need funding in order to be able to economically sustain the military operations which are necessary in times of war. The person who purchases the bond is lending the amount paid (the principal) to the governemnt, in exchange for a subsequent repayment of that principal plus the corresponding interests accrued.