Western Governors University (WGU) EDUC5295 D023 School Financial Leadership Practice Exam

A defining characteristic of registered bonds is that they are issued in the name of specific holders. This means that the ownership of the bonds is recorded by the issuing entity, and the bondholders are directly identified. As a result, interest payments are sent directly to the named bondholders, providing them with a sense of security and ownership that is traceable.

Registered bonds contrast with bearer bonds, which do not have a registered owner, making it easier for them to be transferred but also riskier for the holder since anyone who possesses the bond can claim the interest payment. The issuance of registered bonds contributes to a more organized and secure financial system by ensuring that ownership and interest payments are properly documented and traceable.

The other options do not accurately reflect the defining characteristics of registered bonds. For instance, the notion that they are sold without interest payments is not true, as registered bonds do involve periodic interest payments. The idea that they can be redeemed for gold is outdated and not applicable to modern registered bonds, which are typically denominated in currency. Lastly, registered bonds are not automatically callable by the issuer, as call provisions are separate features that depend on the terms set at issuance.