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    Question

    Which of the following features correctly describe different types of bonds?

    1. Zero Coupon Bonds do not make periodic interest payments and are issued at a discount.

    2. Convertible Bonds can be converted into equity shares at the discretion of the bondholder.

    3. Perpetual Bonds have no maturity date and pay interest indefinitely.

    4. Floating Rate Bonds have interest rates that adjust periodically based on a benchmark rate.

    A 1 and 3 only Correct Answer Incorrect Answer
    B 2 and 4 only Correct Answer Incorrect Answer
    C 1, 2, and 4 only Correct Answer Incorrect Answer
    D 3 and 4 only Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Each type of bond has unique features that define its behavior and investment characteristics.

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