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Basic Question 7 of 18
Income bonds stipulate interest payment schedules, but the interest is due and payable only if the issuers earn the income to make the payments by stipulated dates. If the company does not earn the required amount, it does not have to make the interest payment and it cannot earn the required amount. Income bonds, therefore, are examples of ______.
B. equities
C. pooled investments
A. fixed income investments
B. equities
C. pooled investments
User Contributed Comments 7
| User | Comment |
|---|---|
| johntan1979 | No matter what, bonds are still bonds... FIXED until they are converted. |
| Jwcohen | The buyer is not taking ownership "equity" in the company buyer is still a lendor even if cash flows do not come through. |
| Shaan23 | I chose equities cause it stated it does not have to make the interest payments if it does not have the money(Like Equity). Debt would liquidate stuff and you must pay off your debt. Should've just went with a bond is a bond |
| farhan92 | agree with Shaan23. Don't try overcomplicating your life |
| ascruggs92 | This sounds like preferred shares, which are still considered fixed |
| Inaganti6 | I chose A I'm smarter than shaan ! |
| joeclark | Bond = Debt Instrument |
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
describe classifications of assets and markets
describe the major types of securities, currencies, contracts, commodities, and real assets that trade in organized markets, including their distinguishing characteristics and major subtypes
CFA® 2024 Level I Curriculum, Volume 3, Module 1.