PRC-3 · Chapter 4 · Question 58 of 65
A multinational firm issues formalized certificates to the public to raise Rs. 5 billion. These certificates promise to pay a fixed 8% interest annually and return the principal in 20 years. What are these certificates?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Corporate bonds / Debentures
Explanation
Bonds and debentures are formal, long-term debt instruments issued to the public, carrying a contractual obligation to pay fixed interest and repay the principal.
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