Part 2 Multiple Choice Directions In the Answers column, write the letter that represents the word, or group of words, that correctly completes the statement. 11. Amounts owed to creditors for goods and services are called (a) a promissory note (b) accounts 11. payable (c) a line of credit (d) commercial paper. 12. Rental of equipment, a building, land, or other assets is referred to as (a) debt financing (b) 12. equity financing (c) a mortgage (d) leasing. 13. The federal government bond with the longest maturity is a (a) Treasury bill (b) Treasury bond 13. (c) Savings bond (d) Treasury note. 14. The interest earned is exempt from federal and most state income taxes for a (a) U.S. savings 14. bond (b) municipal bond (c) Treasury bill (d) debenture bond. 15. A corporate bond without collateral is (a) a municipal bond (b) a mortgage bond (c) a debenture 15 . bond (d) an external bond. 16. For a bond, 1/100 of a percentage is called (a) a basis point (b) the bond yield (c) the rate of 16. return (d) a bond rating. 17. The location where securities are traded after they are initially offered is the (a) primary market 17 (b) foreign exchange market (c) mutual funds (d) secondary market. 18. The increase in the value of a bond between the purchase price and the maturity value is the (a) 18. capital gain (b) bond rating (c) yield to maturity (d) coupon rate