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Which of the Following Describes the Difference Between the Returns

Question 14

Multiple Choice

Which of the following describes the difference between the returns on debt and equity?


A) The return on debt is adjusted annually throughout the life of the security,whereas the return on equity is fixed.
B) The return on debt is stipulated in the trust deed,whereas the return on equity is varied at the discretion of management.
C) The return on debt is more variable than the return on equity.
D) The return on debt is stipulated in the debt contract,whereas the return on equity is stipulated in the trust deed.

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