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Corporate bonds are A. held by the borrowers.B.assets for the investors.C.a source of income for the issuing company.D.issued by the investors.

Question

Corporate bonds are A. held by the borrowers.B.assets for the investors.C.a source of income for the issuing company.D.issued by the investors.

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Solution

Corporate bonds are B. assets for the investors.

Here's why:

A. Corporate bonds are not held by the borrowers. In fact, it's the opposite. The borrowers (corporations) issue the bonds, and investors buy and hold them.

B. Corporate bonds are indeed assets for the investors. When an investor buys a corporate bond, they are essentially lending money to the corporation in exchange for periodic interest payments and the return of the principal amount at maturity.

C. Corporate bonds are not a source of income for the issuing company. They are a source of capital or funds. The company has to pay interest on these bonds, which is an expense, not income.

D. Corporate bonds are not issued by the investors. They are issued by the corporations (borrowers) and bought by the investors.

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