LOMA 361 - CHAPTER 5 EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026
accumulated depreciation - Answers The total amount of depreciation allocated to an asset as
of a specified date.
admitted asset - Answers An asset whose full value is reported on the Assets page of the Annual
Statement.
amortized cost - Answers An asset's book value after its cost has been adjusted for applicable
amortization.
bond - Answers A debt security issued by a borrower, typically a corporation or government
entity.
bond discount - Answers The amount by which a bond's purchase price is lower than its par
value.
bondholder - Answers The purchaser, or owner, of a bond.
bond issuer - Answers The entity that sells a bond to raise money.
bond premium - Answers The amount by which a bond's purchase price is higher than its par
value.
cash dividend on stock - Answers A cash payment that a company periodically distributes to the
owners of its preferred stock and common stock.
commercial mortgage-backed security (CMBS) - Answers A type of mortgage-backed security
that is secured by a pool of commercial mortgages.
common stock - Answers A type of stock that usually entitles the owner to (1) vote on the
selection of directors and on other important company matters and (2) receive dividends on the
stock, if they are declared.
corporate bond - Answers A bond issued by a corporation.
coupon payment - Answers A periodic interest payment made on a bond.
coupon rate - Answers The interest rate specified on a bond.
debt security - Answers A security that represents an obligation of indebtedness owed by a
business, a government, or an agency.
derivative security - Answers A security that derives its value from other securities.
accumulated depreciation - Answers The total amount of depreciation allocated to an asset as
of a specified date.
admitted asset - Answers An asset whose full value is reported on the Assets page of the Annual
Statement.
amortized cost - Answers An asset's book value after its cost has been adjusted for applicable
amortization.
bond - Answers A debt security issued by a borrower, typically a corporation or government
entity.
bond discount - Answers The amount by which a bond's purchase price is lower than its par
value.
bondholder - Answers The purchaser, or owner, of a bond.
bond issuer - Answers The entity that sells a bond to raise money.
bond premium - Answers The amount by which a bond's purchase price is higher than its par
value.
cash dividend on stock - Answers A cash payment that a company periodically distributes to the
owners of its preferred stock and common stock.
commercial mortgage-backed security (CMBS) - Answers A type of mortgage-backed security
that is secured by a pool of commercial mortgages.
common stock - Answers A type of stock that usually entitles the owner to (1) vote on the
selection of directors and on other important company matters and (2) receive dividends on the
stock, if they are declared.
corporate bond - Answers A bond issued by a corporation.
coupon payment - Answers A periodic interest payment made on a bond.
coupon rate - Answers The interest rate specified on a bond.
debt security - Answers A security that represents an obligation of indebtedness owed by a
business, a government, or an agency.
derivative security - Answers A security that derives its value from other securities.
