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Finance Flashcards

Finance Chapter 6

When you refer to a bond’s coupon, you are referring to which one of the following?Difference between the purchase price and the face valueAnnual interest divided by the current bond priceDifference between the bid and ask priceAnnual interest paymentPrincipal amount of the bond Annual interest payment
What is the principal amount of a bond that is repaid at the end of the loan term called?CouponMarket priceAccrued priceDirty priceFace value Face Value
On which one of the following dates is the principal amount of a bond repaid?Coupon dateIssue dateDiscount dateMaturity dateFace date Maturity Date
Which one of the following terms refers to a bond’s rate of return that is required by the marketplace?Coupon rateYield to maturityDirty yieldCall yieldDiscount rate Yield to Maturity
The written agreement that contains the specific details related to a bond issue is called the bond:indenture.debenture.document.registration statement.issue paper. Indenture
This morning, Jeff found a bond certificate lying on the floor of a bank. He picked it up and noticed that the bond matured today. He presented the bond to the bank teller and received both the principal and interest payment. The bond that Jeff found must have been which one of the following?DebentureNoteRegistered form bondBearer form bondCallable bond Bearer Bond
Miller Farm Products is issuing a 15-year, unsecured bond. Based on this information, you know that this debt can be described as a:note.bearer form bond.debenture.registered form bond.call protected bond. Debenture

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