When an investor purchases _____,he purchases the right to receive a specified fixed stream of income from the corporation for a specified number of years.

Question

Quizplus · Accepted Answer

A corporate bond is a debt security issued by a corporation to raise capital. When an investor purchases a corporate bond, they are essentially loaning money to the corporation for a specified number of years, and in return, they receive a fixed stream of income (in the form of interest payments) for the duration of the bond. This income payment is contractual and guaranteed, regardless of how the company performs. Therefore, the correct choice is A) Corporate bond.

When an Investor Purchases _____,He Purchases the Right to Receive