A bond is a ________ instrument by which a borrower of funds agrees to pay back the funds with interest on specific dates in the future.

Question

Quizplus · Accepted Answer

A bond is a long-term debt instrument as it involves borrowing funds to be paid back on specific future dates with interest. Options A and D are incorrect as equity represents ownership in a company and not debt. Option C is incorrect as short-term debt refers to borrowing to be paid back within a year, while bonds typically have longer maturities.

A Bond Is a ________ Instrument by Which a Borrower