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    Question

    A debt investment in which an investor lends money to

    an entity (corporate or government) that borrows the funds for a defined period of time at a fixed interest rate is called as?
    A Coupon Correct Answer Incorrect Answer
    B Preference Share Correct Answer Incorrect Answer
    C Debenture Correct Answer Incorrect Answer
    D Share Correct Answer Incorrect Answer
    E Bond Correct Answer Incorrect Answer

    Solution

    A bond is an instrument of indebtedness of the bond issuer to the holders. The most common types of bonds include municipal bonds and corporate bonds. It is a debt security, under which the issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay them interest ( the coupon ) and/or to repay the principal at a later date, termed the maturity date.

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