Which of the following are correct regarding bonds? They obligate the issuing company to pay an estimated amount. They obligate the issuing company to repay the bonds when market interest rates decrease. They obligate the issuing company to repay the bonds when interest rates increase. They obligate the issuing company to pay a specific amount. They obligate the issuing company to repay the bonds at a specific date.

They obligate the issuing company to pay a specific amount. They obligate the issuing company to repay the bonds at a specific date.

Explanation:

A bond can be considered as a debt security in which the issuer owes the holders a debt and is obliged to pay interest or to repay the principal at a specific date known as the maturity date. Interest is called coupon rate and is paid at fixed intervals semiannual, annual, sometimes monthly. Bonds provide the borrower with funds that can be used for investments or to finance current expenditure.

The correct statement is They obligate the issuing company to repay the bonds at a specific date.

Explanation:

Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you're giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date.

A bond is referred to as a fixed income instrument since bonds traditionally paid a fixed interest rate. They are high-risk investments for the issuing company, while they're low-risk for investors.

After repayment of bond on a specific date, the periodic interest that accrue will be paid to the investors subsequently.