Most corporate bonds are ________; that is, they run for a term of years, and then ________.

Question

Quizplus · Accepted Answer

Most corporate bonds are term bonds, meaning they run for a specific term or period of time, and then become due and payable, meaning the principal amount and any remaining interest must be paid back to bondholders. Choice A is incorrect as sinkable bonds are rare and not commonly used. Choice B is incorrect as balloon bonds involve making smaller payments throughout the bond term, with a larger payment due at the end of the term. Choice D is incorrect as becoming due and not payable would mean the bondholders do not receive their principal back at maturity, which is rare for corporate bonds.

Most Corporate Bonds Are ________; That Is, They Run for a Term