Business, 08.07.2019 15:00 sselect1

What is one way in which bonds do not generate income for investors? bonds appreciate in value. bonds pay interest. bonds pay dividends. bonds pay a specified amount at maturity.

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Answer from: ggdvj9gggsc

Answer

D. Bonds pay a specified amount at maturity

Explanation

Bonds are normally part of a family’s investments called fixed-income securities. These securities are debt obligations where one party will be borrowing money from another party who expects to get the pay back in form of the principal plus interest. An investor can make money from a coupon-paying bond through receiving interest payments and by changing price of a bond by guessing the interest. An investor can make money on a zero-coupon bond by receiving interest paid upon maturity.

Answer from: jrjordans13ox06qs

The bonds do not generate income for the investor when bonds pay a specified amount at maturity.

Further Explanation:

Bond is an instrument of getting loan from the public. The company raises the fund from the bonds. Bondholder refers to that person who invests in the company ways a bond. The company paid the interest payment and dividends to the bondholder. After maturity, the company pays the bond value.

Justification for the correct and incorrect

Bonds appreciate in value: This option is incorrect.

If the value of the bond is appreciated, the bondholder sells off the bond. The bondholder gets the profit. This option generates income.

Bonds pay interest: This option is incorrect.

The company pays a fixed amount of interest every year. This is one way to generate income.

Bonds pay dividends: This option is incorrect.

If the company pays dividend, then the bondholder also gets the income of interest payment.

Bonds pay a specified amount of money: This option is correct.

The company has to pay back the amount of debt. The bondholder does not get the income on this amount. The company has to pay back the amount of debt. The investor does not earn the profit on this amount.

Learn more:

1.Learn more about bond due

2.Learn more about stocks and bonds

3.Learn more about trade-offs

Answer details:

Grade: High School

Subject: Financial Accounting

Chapter: Bond

Keywords:

bond, generate, income, investor, appreciate value, a specified amount of money, dividends, bondholder, interest payment and income.

Answer from: Quest

lives by a moral and ethical code

Answer from: Quest

Acompany's market information will go best with the sentence

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