Corporate And Government Bonds

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Question 1

Free

Multiple Choice

Which one of the following best defines a plain vanilla bond?

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bond secured by agricultural or food inventory

bond with relatively standard features

unsecured debt

bond secured with financial collateral

bond that has no coupon payments

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Question 2

Free

Multiple Choice

Which one of the following terms is defined as debt issued without specific collateral pledged as security?

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unsecured debt

indenture

vanilla bond

naked bond

risk-free bond

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Question 3

Free

Multiple Choice

Which one of the following is an unsecured bond issued by a corporation?

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indenture

general obligation bond

plain vanilla bond

debenture

trust bond

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Question 4

Free

Multiple Choice

Which one of the following is the portion of a prospectus that outlines the contractual terms of a new bond issue?

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indenture summary

financial disclosure

covenant agreement

security agreement

trust agreement

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Question 5

Free

Multiple Choice

What is the document called that is distributed to potential bondholders and provides detailed information on the financial position and operations of the bond issuer?

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indenture summary

prospectus

trust statement

10K

10Q

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Question 6

Multiple Choice

Which one of the following is an unsecured bond that has a higher claim on a firm's assets than other unsecured bonds?

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plain vanilla bond

subordinated debenture

refunded bond

senior debenture

collateral trust bond

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Question 7

Multiple Choice

During a bankruptcy proceeding,Bond A will be paid only if funds remain after the bonds that have a higher claim on the issuer's assets have been paid.What type of bond is Bond A?

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plain vanilla bond

senior trust bond

junior trust bond

subordinated debenture

senior debenture

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Question 8

Multiple Choice

Which one of the following is the clause which prevents a bond issuer from issuing new debt that has seniority over current debt?

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first-in-line

sinking fund

call provision

affirmation

negative pledge

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Question 9

Multiple Choice

Which one of the following accurately describes bond refunding?

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replacing maturing bonds with a new bond issue

calling existing bonds and refinancing those bonds with new debt

paying off bonds early with excess cash generated by the firm

replacing maturing bonds with an equity issue

paying bonds off early to satisfy disgruntled bondholders

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Question 10

Multiple Choice

Which one of the following provisions grants the bondholder the option of selling the bond back to the issuer at a prespecified price on prespecified dates?

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convertible

call

put

exchange

sinking fund

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Question 11

Multiple Choice

Which one of the following provisions grants the bondholder the option of exchanging a bond for a prespecified number of shares of stock of the same issuer?

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put

call

equity

conversion

sinking

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Question 12

Multiple Choice

Which one of the following defines an in-the-money bond?

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secured bond with collateral value that exceeds the bond's price

callable bond with a call price that exceeds the current market price

put bond with a put price that exceeds the current market price

convertible bond with a call price that exceeds its conversion value

convertible bond with a conversion value that exceeds its call price

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Question 13

Multiple Choice

Which one of the following terms is given to the value of a convertible bond that would equate to the value of a comparable nonconvertible bond?

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out-of-the money value

in-the-money value

discounted value

external value

intrinsic value

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Question 14

Multiple Choice

What is a bond called if it can be converted into shares of stock of a firm other than the bond issuer?

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swap bond

alternate bond

exchangeable bond

convertible bond

callable bond

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Question 15

Multiple Choice

Term bonds are defined as all bonds in a bond issue having which one of the following characteristics?

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sequential maturity dates

serial maturity dates

multiple maturity dates

an identical maturity date

renewable maturity dates

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Question 16

Multiple Choice

Bonds issued with a regular sequence of maturity dates are called which one of the following?

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callable bonds

sequential bonds

serial bonds

sinking bonds

put bonds

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Question 17

Multiple Choice

Which one of the following is an account used to provide for scheduled redemptions of outstanding bonds?

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redemption fund

sinking fund

liquidation account

serial account

callable account

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Question 18

Multiple Choice

What are the various provisions within a bond indenture that are designed to protect bondholders by restricting the actions of the issuer called?

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restrictive actions

prohibitions

negative conditions

protective covenants

restrictive amendments

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Question 19

Multiple Choice

Which one of the following identifies a new bond issue as being a private placement?

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The proceeds of the issue are used for a single project.

The issue is marketed through a sole brokerage house.

The issue is sold only to individuals rather than to institutional investors.

The issue is not made available to the public.

The issue names a private individual as the bond trustee.

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Question 20

Multiple Choice

Adjustable-rate bonds are identified by which one of the following characteristics?

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The coupon rate will increase should the credit rating of the bond decline.

Different bonds within the same issue have different coupon rates.

Bondholders can defer coupon payments at their discretion.

The amount of each coupon payment will depend on the free cash flow of the issuer.

The coupon rate changes in response to changes in current market rates.

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