Finance Questions

convertible bonds Other things being​ equal, investors will value which of the following bonds the​ highest? A.callable bondsB.convertible bondsC.unsecured, callable bondsD.bonds that are both callable and convertible
true The expected yield on junk bonds is higher than the yield on AAA-rated bonds because of the higher default risk associated with junk bonds.
false Debentures are expected to have a lower yield than secured bonds because the debentures are more risky and therefore less desirable.
the subordinated debenture If a corporation were to choose between issuing a​ debenture, a mortgage​ bond, or a subordinated​ debenture, which would have the highest yield to​ maturity, everything else​ equal?A. the subordinated debentureB.the mortgage bondC.the debentureD.all of the above
at a premium What is a bond called if it is selling above its par​ value?When a bond is worth more than its face​ value, it is said to sella. above its market returnb. at a discountc. at a premiumd. at its maturity value
true bond prices are inversely related to market interest rates
interest rates decrease Progressive Corporation issued callable bonds. The bonds are most likely to be called ifA.Progressive Corporation needs additional financing.B.Progressive​ Corporation’s stock price increases dramatically.C.interest rates decrease.D.interest rates increase.
These bonds are convertible into common stock of the issuing firm at a prespecified price. Which of the following statements is true regarding convertible​ bonds?A.These bonds have a variable interest rate.B.The holder can convert these bonds into an equal number of new bonds if they choose to do so.C.The holder has the right to sell these bonds back to the issuer if the bonds​ don’t perform well.D.These bonds are convertible into common stock of the issuing firm at a prespecified price.
true An example of a Eurobond is a bond issued in Asia by a U.S. Corporation with interest and principal payments made in U.S. dollars.
long-term bonds have greater interest rate risk than do short-term bonds Which of the following statements is​ true?A.Long-term bonds have greater interest rate risk than do short-term bonds.B.Short-term bonds have greater interest rate risk than do long-term bonds.C.All bonds have equal interest rate risk.D.Interest rate risk is highest during periods of high interest rates.

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