Question
Consider the following statements about Bonds:
1. Bonds are units of corporate debt issued by companies and securitized as tradable assets. 2. A bond is referred to as a fixed-income instrument. 3. Bonds traditionally paid a fixed interest rate (coupon) to debtholders. Which of the above statement is/are correct?Solution
Bonds : Bonds are units of corporate debt issued by companies and securitized as tradable assets. A bond is referred to as a fixed-income instrument since bonds traditionally paid a fixed interest rate (coupon) to debtholders. Variable or floating interest rates are also now quite common.
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