Why are U.S. Treasury bonds considered to be safe? O They are repaid from user fees. O They are secured by the full-faith-and-credit of the U. S. government. O They mature in one year or less. O They provide income exempt from all forms of income taxes.

Why are U.S. Treasury bonds considered to be safe? O They are repaid from user fees. O They are secured by the full-faith-and-credit of the U. S. government. O They mature in one year or less. O They provide income exempt from all forms of income taxes.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 24GI

See similar textbooks

Related questions

Q: Please calculated the answer in a correct, precise, and comprehensive manner along with relevant…

A: IRR is also known as Internal rate of Return. It is a capital budgeting technique which helps in…

Q: A county will invest $4,800,000 to clean up a chemical spill that occurred following a natural…

A: Given that;$4800000 will be invested to clean up a chemical spill that occured due to natural…

Q: Marchaund borrowed $4,500 for 90 days, with a 12% simple discount rate. What is the effective rate?…

A: It is given in the question that the borrowing was done at 12% simple discount rate. It should be…

Q: The process by which management plans, evaluates, and controls long-term investment decisions…

A: Capital investment analysis is the process in which business managers take decision to plan,…

Q: Consider a bond that has a price of $1000.00, a coupon rate of 6.4%, a yield to maturity of 6.4%, a…

A: YTM is also known as Yield to maturity. It is a capital budgeting technique which helps in decision…

Q: Your company has a project available wit the following cash flows: Year Cash Flow 0 $81,300,…

A: IRR is one of the most used method of capital budgeting based on the time value of money and is…

Q: Statement 1: On average, emerging market stocks should provide higher returns than U.S. stocks. True…

A: Money is invested in stock market to earn profit on investment. Rate of return in stock market…

Q: An insurance company found that 2.4% of male drivers between the ages of 18 and 25 are involved in…

A: An insurance policy is an contractual agreement between the policyholder and insurance company,…

Q: Jon, age 48, earns $65,000 per year from his employer. Jon saves $15,000 per year for retirement and…

Q: What is the present value of this cash flow given 12% discount rate?

A: The present value is the current value of the sum of money that has been discounted at a particular…

Q: i am sending you this question again iwant formula for this and fully explained by you but not in…

A: Principal amount (P) = $750,000Annual interest rate = 5.70%Total number of payments per year (n) =…

Q: Last year, your company had sales of $16,966,119. The firm's costs of goods sold amounted to 60% of…

A: Sales = s = $16,966,119Cost of Goods Sold rate = cogsr = 60% of SalesOperating Expenses = oe =…

Q: The nominal interest rate compounded quarterly, ; (4) is 6%. Let i be the annual effective interest…

A: The cost of borrowing money or the return on investment represented as a percentage of the principal…

Q: Patterson Brothers recently reported an EBITDA of $12.5 million and net income of $3.75 million. It…

A: Depreciation and amortization are critical accounting methods for methodically distributing the cost…

Q: Patterson Brothers recently reported an EBITDA of $16.5 million and net income of $5.775 million. It…

A: Earning Before Interest, Taxes Depreciation and Amortization = EBITDA = $16.5 millionNet Income = ni…

Q: The efficient market hypothesis holds that that financial markets price assets at their intrinsic…

A: The Efficient Market Hypothesis (EMH) is a key theory in finance positing that financial markets…

Q: A new solid waste treatment plant is to be constructed in Washington County. The initial…

A: Capitalised cost:The capitalised cost of an asset is its overall cost, which includes the initial…

Q: What is National Savings Certificate? A. Short-term U.S. government debt obligation B. A…

A: National Savings Certificate is a saving plan issued by the Government of India. Savings are made…

Q: Which one of the following statements is true? Multiple Choice A call with a strike price of $25 and…

A: An option is a type of financial instrument that is based on the value of underlying securities,…

Q: Suppose you have a choice between receiving $5,000 today or $10,000 in five years. You believe you…

A: > Given data:> Present value (PV) = 5000> Interest rate (r) = 10%> Number of periods ()…

Q: Joan has a choice of purchasing a car for $20,000 with 9.7% interest cost to borrow and a 3 year…

A: Lease:The lessor, who is the property's owner, and the lessee, who is the renter, engage into a…

Q: Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.2 % x…

A: Project benefit obligation refers to the measurement of the present need of the company for meeting…

Q: A company has total equity of $2,175, net working capital of $245, long-term debt of $1, 080, and…

A: Total Equity = e = $2175Net working Capital = nwc = $245Long Term Debt = ltd = $1080Current…

Q: Chain Reaction SA, has been growing at a phenomenal rate of 30% per year because of its rapid…

A: The Dividend Discount Model (DDM) is a method used to value a company's stock by estimating the…

Q: On January 1 of the current year, Southwest Inc. adopts a plan to accumulate funds for environmental…

A: Future value required=$2000000Interest rate=10%Number of deposits=4

Q: You are evaluating the balance sheet for Corpus Correction. From the balance sheet you find the…

A: Working Capital is a measure that tells the company's liquidity and how much time it will take to…

Q: You have estimated spot rates as follows: r₁ = 5.00%,r₂ = 5.40%,13 = 5.70%,14 = 5.90%,15 = 6.00%. a.…

A: The bond price in the current date can be the sum of the discounted value of all the coupons paid…

Q: You want to be a millionaire when you retire in 40 years. a. How much do you have to save each month…

A: Future value of an annuity refers to the total value of a series of regular payments or cash flows…

Q: What is the Discounted Payback Period? 13.57 13.88 14.07 PV of cash flow not efficient to cover the…

A: Discounted Payback Period is method of capital budgeting used to calculate the time it takes for a…

Q: Estimating the annual interest rate with an ordinary annuity. Fill in the missing annual interest…

A: Ordinary annuity refers to the series of payments at the end of the period that is compounded or…

Q: You buy a share of stock, write a 1-year call option with X- $85, and buy a 1-year put option with…

A: > Call option writing refers to selling a call option to another investor where the buyer has…

Q: A company owns land and a building that houses its manufacturing operations. When the company…

A: The fair value of the land is the amount it could be sold for in the current market.

Q: A young married couple wishes to set up a fund that can be used for various home equipment purchases…

A: Variables in the question:A=-$10000G=$1000i=6%n=10 yearsCash Flow Diagram:

Q: (Present value of a complex stream) Don Draper has signed a contract that will pay him $70,000 at…

A: The present value refers to current value of the future cash flows being discounted at the interest…

Q: Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.9 percent paid…

A: A Bond refers to a concept that is defined as an instrument that represents the loan being made by…

Q: You are considering a stock investment in one of two firms (NoEquity, Inc., and NoDebt, Inc.), both…

A: Total assets of company include debt and equity and return on assets is amount of percentage net…

Q: In 2021, the BowWow Company purchased 19,910 units from its supplier at a cost of $13.00 per unit.…

A: Cost of goods sold (COGS) refers to the total direct costs incurred by a company to produce goods or…

Q: peggy greys cookies has a net income of $410. the firm pays out 37 percent of the net income to its…

A: Cash flow to stakeholders are also known as cash flow to the shareholders. A company has various…

Q: Treasury securities are completely risk-free. True O False

A: Treasury securities, sometimes known as "Treasurys" or "Treasury bonds," are issued by the US…

Q: To find the quoted price of a 180-day T - bill with a 5% yield and the contract price for a $…

A: Treasury bills are short term debt securities issued by the U.S. Department of the treasury serve as…

Q: Using the appropriate interest table, provide the solution to each of the follofour questions by…

A: The future value of an annuity is the total value of a series of equal cash flows received or paid…

Q: A parking garage charges $3.00 for the first hour and $0.75 for each additional hour. If a customer…

A: Car parked from 10 A.M - 3 PMTotal number of hours car was parked = 5 hoursFirst hour rate = 3$So…

Q: uppose you are the human resource manager for a cellular phone company with 700 employees. Top…

A: Life insurance cost=$390 per quarter and company contribution=40%Legal cost=$312 per semi annual…

Q: The financial statement that reports assets, liabilities, and stockholders' equity as of the last…

A: The statement of cash flow is a financial statement that provides a complete overview of a company's…

Q: Arithmetic and Geometric Returns (LO1) A stock has had returns of 9%, 21%, 32%, -18%, 27%, and -12%…

A: Arthmetic return is the simple average return calculated by dividing sum of all returns by the…

Q: In planning for your retirement, you would like to withdraw $50,000 per year for 17 years. The first…

A: To calculate the present value of a series of future cash flows, you can use the formula for the…

Q: Find the future value and total interest of the annuity. Periodic Annual interest Annuity type…

A: The future value of the annuity will be the accumulated amount along with the compounding interest…

Q: Today, the stock price of Genevo Co. (based in Switzerland) is priced at SF70 per share. The spot…

A: American Depository receipt(ADR) are financial institute give rights to U.S. investors to trade in…

Q: The December 31, 2021, balance sheet of Chen, Incorporated, showed $140,000 in the common stock…

A: Cash flow to stockholders is the amount of increase in equity and minus amount of dividend paid.

Q: A Textile Company bought equipment for $30,000. The residual value is $5,000. The company assumes…

A: Cost of equipment = $30,000Residual value = $5,000Estimated useful life = 150,000 units

Question

Why are U. S. Treasury bonds considered to be safe? O They are repaid from user fees. O They are
secured by the full-faith-and-credit of the U. S. government. O They mature in one year or less. O
They provide income exempt from all forms of income taxes.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Explanation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

b. Why would one company with interest payments due in pounds sterling want to swap those payments for interest payments due in U.S. dollars? Write an example.
What is National Savings Certificate? A. Short-term U.S. government debt obligation B. A fixed - income investment scheme C. A financial product commonly sold by banks, thrift institutions, and credit unions D. An unsecured money market instrument
If the national debt increases, is it true that we need not worry about the debt as long as the country is able to make payments on the debt? State why or why not. Explain your answer clearly.
True or False: The Fed manages the level of short-term interest rates by altering federal income tax rates.
If the U.S. Treasury deposits income tax receipts into its account at the Federal Reserve, then a. the money multiplier will decrease b. the money multiplier will increase c. the monetary base will decrease d. the monetary base will increase Expected inflation can be estimated as a. the return on a TIPS bond b. the return on a Treasury bond c. the return on a TIPS bond minus the return on a Treasury bond d. the return on a Treasury bond minus the return on a TIPS bond A decrease in the expected return on stocks will a. shift the demand curve for bonds leftwards b. shift the demand curve for bonds rightwards c. shift the supply curve for bonds leftwards d. shift the supply curve for bonds rightwards Which of the following is part of M2? a. Small time deposits b. Money market mutual funds c. Currency held by foreigners d. All of the above
The National Bank of Kazakhstan charges a discount interest rate on emergency loans to commercial banks. At one time, the National Bank set this interest rate beneath the base interest rate, which is the benchmark interest rate in Kazakhstan’s economy. But the National Bank now sets the discount rate equal to the base rate. Why might this have been prudent?
Assume us government's issues 170,000,000 treasury bill for settlement of citizen's claims. So which of financial asset characters the above statement is?a, currency b,money ness c, term to maturity d, convertibility
Company A, a British manufacturer, wishes to borrow U.S. dollars at a fixed rate of interest. Company B, a U.S. multinational, wishes to borrow sterling at a fixed rate of interest. They were quoted the following rates per annum (adjusted for differential tax effects): Sterling US Dollars Company A 8.6% 7.65% Company B 7.8% 6.2% Design a swap that will net a bank, acting as intermediary, 15 basis points per annum and that will produce a gain of 25 basis points per annum for each of the two companies. Explain your answer in words and show the computations, and depict the swap rates in a flow chart
Identify each transaction by whether it belongs in the US current account or financial account: The central bank of China collects interest payments on US government securities that it had previously bought. O Financial Account O Current Account
Interest Rate Parity Consider investors who invest in either U.S. or British one-year Treasury bills. Assume zero transaction costs and no taxes. If interest rate parity exists, then the return for U.S. investors who use covered interest arbitrage will be the same as the return for U.S. investors who invest in U.S. Treasury bills. Is this statement true or false? If false, correct the statement.
How does the interest paid on U.S. savings bonds compare to the savings account rates paid by banks and credit unions? A.The interest paid on U.S. savings bonds is higher than the savings account rates paid by banks and credit unions. B.The interest paid on U.S. savings bonds is lower than the savings account rates paid by banks and credit unions. C.The interest paid on U.S. savings bonds is twice as much as the savings account rates paid by banks and credit unions. D.The interest paid on U.S. savings bonds is the same as the savings account rates paid by banks and credit unions.
Suppose the Swiss government imposes an interest rate ceiling on Swiss bank deposits. What is the likely effect on Eurofranc interest rates of this regulation?