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    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?

    A 1 only Correct Answer Incorrect Answer
    B 2 only Correct Answer Incorrect Answer
    C 3 only Correct Answer Incorrect Answer
    D 1 and 2 both Correct Answer Incorrect Answer
    E 1, 2 and 3 Correct Answer Incorrect Answer

    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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