Which of the following statements about the characteristics of debt and equities is true?

Structure of Financial Markets

1) Which of the following statements about the characteristics of debt and equity is false?

A) They can both be long-term financial instruments.

B) They can both be short-term financial instruments.

C) They both involve a claim on the issuer\"s income.

D) They both enable a corporation to raise funds.

2) Which of the following statements about the characteristics of debt and equities is true?

A) They can both be long-term financial instruments.

B) Bond holders are residual claimants.

C) The income from bonds is typically more variable than that from equities.

D) Bonds pay dividends.

3) Which of the following statements about financial markets and securities is true?

A) A bond is a long-term security that promises to make periodic payments called dividends to the firm\"s residual claimants.

B) A debt instrument is intermediate term if its maturity is less than one year.

C) A debt instrument is intermediate term if its maturity is ten years or longer.

D) The maturity of a debt instrument is the number of years (term) to that instrument\"s expiration date.