Question

Generally, a corporate bond is NOT an example of an amortized loan.

Answer 1

Answer : Generally, a corporate bond is NOT an example of an amortized loan because Amortized Loan is the type of Loan which includes fixed repayment schedule over repayment period of loan. Payments are made in installments consisting of both principal and interest. But in case of Corporate Bonds. company is borrowing money for a series of interest payments only. Therefore Generally, a corporate bond issued by company is NOT an example of an amortized loan because it generally involves payment of Interest only.