Asked by olivia woods on Jul 26, 2024
Verified
The term "buying a bond" is misleading because:
A) bonds are not available to the general public.
B) a bond can only be bought with assets other than money.
C) bonds represent a debt relationship so a bond buyer is actually lending money.
D) bonds are not owned, only held in trust for a buyer's beneficiaries.
Buying a Bond
The act of purchasing a bond, a debt security issued by entities such as governments or corporations, where the issuer owes the holders a debt and is obliged to pay interest.
Debt Relationship
The relationship between a borrower and lender, defined by the terms under which money or goods are borrowed.
Lending Money
The act of giving money to an individual or entity with the expectation that the amount will be returned, often with interest, at a later date.
- Make distinctions between real and financial assets, learn about the features of bonds, and the theory behind debt relations.
Verified Answer
DG
denetriA gardnerJul 26, 2024
Final Answer :
C
Explanation :
Buying a bond represents a debt relationship, where the buyer is actually lending money to the issuer of the bond, so the term "buying a bond" is misleading. Option A is incorrect as bonds are available to the general public. Option B is incorrect as bonds can be bought with money. Option D is incorrect as bonds are owned by the buyer and held in their investment portfolio.
Learning Objectives
- Make distinctions between real and financial assets, learn about the features of bonds, and the theory behind debt relations.