PRC-3 · Chapter 4 · Question 45 of 65
A public utility company issues certificates to public investors promising to pay 9% interest annually and repay the principal amount after 10 years. What is the financial term for these instruments?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Bonds / Debentures
Explanation
Bonds and debentures are formal, long-term debt instruments issued to raise capital, characterized by fixed interest payments and a set maturity date.
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