Which of the following best illustrates why a bond is a type of loan?
A) Federal and state governments issue bonds to finance long-term projects.
B) When an investor buys a bond from an issuer, the investor is giving money to the issuer, with the assurance it will be repaid at a date in the future.
C) The issuers of bonds regularly pay interest on the face value of the bond to the buyers of those bonds.
D) When a company issues a bond, the buyer of that bond becomes a part owner of the issuing company.
Correct Answer:
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