Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

11. Long Term Liabilities

Introduction to Bonds and Bond Characteristics

Financial Accounting

11. Long Term Liabilities

Introduction to Bonds and Bond Characteristics

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Multiple Choice

Which of the following represents a special feature that may be included with some bond issues?

Fixed coupon rate

Callable option

Maturity date

Face value

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Verified step by step guidance

Understand the concept of bonds: Bonds are debt instruments issued by entities like corporations or governments to raise funds. They typically include features such as a fixed coupon rate, maturity date, and face value.

Learn about callable bonds: A callable bond includes a special feature called a 'callable option,' which allows the issuer to redeem the bond before its maturity date, usually at a predetermined price. This is advantageous for the issuer if interest rates decrease, as they can refinance the debt at a lower cost.

Differentiate between standard bond features and special features: Fixed coupon rate, maturity date, and face value are standard features of bonds, while the callable option is a special feature that is not present in all bond issues.

Analyze the options provided in the question: Fixed coupon rate, maturity date, and face value are standard features of bonds, whereas the callable option is a special feature that may be included with some bond issues.

Conclude that the correct answer is 'Callable option,' as it represents a special feature that is not universally included in all bond issues but may be added depending on the issuer's preferences.