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courses.aplia.com Aplia: Student Quest eyPLUS Home Grades Personalized Reviews Discussion Course Materials Bonds and Their Valuation Graded Assignment | Read Chapter 7 | Back to Assignment Due Saturday 12.02.17 at 11:15 PM Average:8/8 Attempts: 5. Types of bonds Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities in which a Aa Aa borrower promises to pay a specified interest rate and principal at a future date. The entity that promises to make the interest and maturity payments for a bond issue is called the issuer shareholder guarantor Based on the information given in the following statement, answer the questions that follow: New York City issued a general obligation bond for a canal in 1812. It was the first formal debt instrument with a fixed repayment schedule issued by a city Who is the issuer of the bonds? What type of bonds are these? The New York City government O Federal Reserve Bank of New York O Bank of New York Municipal bonds O Corporate bonds O Treasury bonds 03 2.34 1 © 2004-2016 Apia, AS rigres reserved 0 2013 Cengage Learning except as noted A ights eserved rade It Now Save & Continue Continue without saving

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The entity that promises to make interest and maturity payments is called the issuer. Shareholder is the person to whom shares are issued and he pays in return at the time of issue. Thereafter, he receives interest and payment on maturity. Guarantor is a person who gives a guarantee that in case the issuer fails to make the payment of interest or amount on maturity, he will make the payment. The purpose of having an guranator associaed with issue is when a shareholder is assured that there is a guarantor who can pay if the issuer fails to make the payment, the shareholder's confidence increases.

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