Question

Last year, Lexington Homes issued $1 million in unsecured, noncallable debt. This debt pays an annual interest payment of $55 and matures six years from now. The face value is $1,000 and the market price is $1,020. Which one of these terms correctly describes a feature of this debt?a. semi-annual coupon
b. discount bond
c. note
d. trust deed
e. collateralized

Answer 1

Answer:

c. note

Explanation:

A treasury note :

1. Has a maturity greater than a year but less than 10 years

2. Pays semi annual coupons.

3. Are sold in increments of $100.

Discount bond is a bond that is issued for less than its face value.

I hope my answer helps you

Answer 2

Answer: C- Note

Explanation: A note is a legal document issued by a creditor to a borrower or investor. It legally obligate issuers to repay the creditor the principal loan plus any accrued interest at a predetermined date in the future.

A note is also a debt security, obligating a creditor to pay the principal plus accrued interest to the creditor or investor at a future date.

There are different types of notes and they include:

1. Treasury note

2. Bank notes

3. Promissory note

4. Convertible notes

5. Municipal notes

6. Mortgage backed note. etc