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Bonds have to be paid back plusMultiple Choiceinterest.stock.equity.debt.holding charges.

Question

Bonds have to be paid back plus

  • Multiple Choice
    • interest
    • stock
    • equity
    • debt
    • holding charges.
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Solution

The correct answer is debt.

When a bond is issued, it represents a debt obligation. The issuer of the bond is required to pay back the principal amount (the face value of the bond) along with interest payments to the bondholders. Bonds are a way for entities such as corporations and governments to raise funds by borrowing from investors with the promise of repayment at a future date, typically with periodic interest payments.

In contrast, stocks represent ownership in a company, and equity refers to ownership of assets after liabilities are deducted, while holding charges are fees associated with storing commodities or investments. Therefore, in the context of your question regarding how bonds are paid back, the term that best fits is 'debt'.

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