Alex holds a corporate bond in a wool manufacturing company. This bond is a formal IOU issued by the company. As a bondholder, Alex's relationship with the company is that of a(n):
A) creditor.
B) borrower.
C) stockholder.
D) owner.

Question

Quizplus · Accepted Answer

Alex, as a bondholder, is a creditor to the company because he has lent money to the company in exchange for the bond, which is a debt instrument.

Alex Holds a Corporate Bond in a Wool Manufacturing Company