Which of the following statements are notcorrect about ‘bond’ ?
It is an instrument of raising long-term capital.
Bond-issuing body pays interest on it which is known as ‘contango rate’.
It may be issued by governments and private companies both.
‘Bonds’ and ‘debantures’ are different in nature.
Codes:
Options:
A . Neither of the above
B . 2 only
C . 1 and 3 only
D . All are true
Answer: Option B Answer: (b)The interest paid on bonds is known as ‘coupon’ or ‘coupon rate’. Bonds and debentures both are the instruments of raising long-term capital but while the former is supported by collateral in the former is supported by collateral in the form of immovable property, the latter are not.
Submit Comment/FeedBack