Q. Which of the following statements about financial markets and securities are true? (Solved)
1. A bond is a long-term security that promises to make periodic payments called dividends to the firm’s residual claimants.
2. A debt instrument is intermediate term if its maturity is less than one year.
3. A debt instrument is long term if its maturity is ten years or longer.
4. The maturity of a debt instrument is the time (term) to that instrument’s expiration date.
- c. A debt instrument is long term if its maturity is ten years or longer.