11
InstructionMultiple Choice

Buying Bonds

Question 11 • ****Spring 2026 Financial Math - MA2007 MQS21QXV

Which of the following kinds of bonds earn interest?I. Corporate bondsII. Bonds selling at a discountIII. Municipal bonds

Answer
A
I and II
B
II only
C
I and III
D
I, II, and III

Explanation

Corporate bonds and municipal bonds generally pay interest to their bondholders. A bond selling at a discount also earns a return: the difference between its purchase price and the amount repaid at maturity adds to the interest income. Therefore, all three kinds earn interest or a return, so the correct choice is “I, II, and III.”

AI-written and checked against the verified answer.

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