Asked by Amirul Hasan on Jun 20, 2024
Verified
A 10-year corporate bond was issued 5 years ago.What is it today?
A) a long-term bond with 5 years to maturity
B) a medium-term bond with 5 years to maturity
C) a long-term bond with 15 years to maturity
D) a medium-term bond with 15 years to maturity
Corporate Bond
A type of debt security issued by corporations to finance their operations, infrastructure, and expansion plans, with the promise to pay back with interest.
Long-Term Bond
A long-term bond is a debt security with a maturity of typically more than 10 years, used by corporations and governments to raise large amounts of capital.
Medium-Term Bond
A bond with a maturity period typically ranging from 5 to 10 years, serving as an investment option between short-term and long-term bonds.
- Determine the different kinds of bonds and their specific attributes.
Verified Answer
JH
Jonathan HawksJun 27, 2024
Final Answer :
B
Explanation :
A bond that was issued as a 10-year bond but has been outstanding for 5 years now has 5 years left until its maturity. This places it in the medium-term bond category, as bonds with maturities between 1 and 10 years are typically considered medium-term.
Learning Objectives
- Determine the different kinds of bonds and their specific attributes.