Which of the following statements about financial markets and securities is TRUE?
A)A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants.
B)A debt instrument is intermediate term if its maturity is less than one year.
C)A debt instrument is intermediate term if its maturity is ten years or longer.
D)The maturity of a debt instrument is the number of years (term)to that instrument's expiration date.

Question

Quizplus · Accepted Answer

The maturity of a debt instrument refers to the time until the instrument's expiration date. Therefore, option D is the correct statement. Option A is incorrect as it describes a stock, not a bond. Option B is incorrect as intermediate-term debt typically refers to maturities between one and ten years. Option C is incorrect as maturities of ten years or longer are typically considered long-term debt.

Which of the Following Statements About Financial Markets and Securities