Which of the following statements regarding bonds is true?
A) Bonds are liabilities of the issuer.
B) Individuals investing in bonds receive dividends.
C) Bonds cannot be purchased or sold prior to maturity.
D) Income from bonds varies every year.
E) The principal invested in bonds is not returned at the time of maturity.

Question

Quizplus · Accepted Answer

Bonds are debt securities issued by companies, municipalities, and governments to finance their operations and projects. Bonds represent a promise by the issuer to pay the investor the face value of the bond plus periodic interest payments until the maturity date. Therefore, bonds are liabilities of the issuer, not assets.

Which of the Following Statements Regarding Bonds Is True