To be useful for decision making, information should possess the fundamental qualities of relevance and <u>Faithful representation</u>.
<h3>What is faithful representation?</h3>
Faithful representation can be defined as the financial accounting concept that stated a company financial position which they present should be correct with what the company has as their financial statement.
It is paramount that a company a financial statement is accurate to what they present in the financial statement and should not be compromise.
Therefore To be useful for decision making, information should possess the fundamental qualities of relevance and <u>Faithful representation</u>.
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Answer:
$4,420.35
Explanation:
Bond Price = ![C x [1 - (1 + r)^{-n} / r] + F / (1 + r)^{n}](https://tex.z-dn.net/?f=C%20x%20%5B1%20-%20%281%20%2B%20r%29%5E%7B-n%7D%20%2F%20r%5D%20%2B%20F%20%2F%20%281%20%2B%20r%29%5E%7Bn%7D)
Where:
- C = Coupon
- r = Yield to Maturity
- n = compounding periods to maturity
Now we plug the amounts into the formula =
![Bond Price = $140 x [1 - (1 + 0.034)^{-32} / 0.034] + $5,000 / (1 + 0.034)^{32}](https://tex.z-dn.net/?f=Bond%20Price%20%3D%20%24140%20x%20%5B1%20-%20%281%20%2B%200.034%29%5E%7B-32%7D%20%2F%200.034%5D%20%2B%20%245%2C000%20%2F%20%281%20%2B%200.034%29%5E%7B32%7D)

Answer: Derivative security
Explanation:
Derivative security is referred to as the security that provides a payoff which depends on the values of other assets.
A derivative security is referred to as the financial instrument whereby the value depends on the value of another asset. There are different types of derivatives such as options, swaps, futures, and forwards. Example of derivative security is convertible bond.
A mutual funds is the instrument that may not be purchased on margin but can be used as collateral for a margin loan after being held for 30 days.
<h3>What is purchased on margin?</h3>
This generally involves the act of getting a loan from your brokerage and then, using the money from such loan to invest in more securities than you can buy with your available cash.
Through the method, an investors can amplify their returns if their investments outperform the cost of the loan itself.
In conclusion, the mutual funds can be purchased on margin. However, it may be used as collateral for a margin loan after being held for 30 days.
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