Financial Management - Study Mode

[#821] If the following is an element of dividend policy?
Correct Answer

(C) Informational content

[#822] A short-term lease which is often cancellable is known as:
Correct Answer

(C) Operating Lease

[#823] Bonds issued by local and state governments with default risk are
Correct Answer

(A) municipal bonds

Explanation

Solution: Bonds issued by local and state governments with default risk are municipal bonds. Municipal bonds are loans investors make to local governments.

[#824] Indexed bonds that are issued by linking payments to inflation are classified as
Correct Answer

(A) treasury inflation protected securities

Explanation

Solution: Indexed bonds that are issued by linking payments to inflation are classified as treasury inflation protected securities. Treasury Inflation-Protected Securities (TIPS) are a form of U.S. Treasury bond designed to help investors protect against inflation. These bonds are indexed to inflation, have U.S. government backing, and pay investors a fixed interest rate as the bond's par value adjusts with the inflation rate.

[#825] Bonds having zero default risk are classified as
Correct Answer

(D) treasury bonds

Explanation

Solution: Bonds having zero default risk are classified as treasury bonds.