Why does it matter if a bond is considered investment-grade? O Federal regulation prohibits the sale of other bonds to senior citizens (the elderly) O Only accredited investors can buy bonds that are not of this type O Some institutional investors (i.e. pension funds and insurance companies) can only by this type of bond
Q: A discount on bonds payable: O Occurs when a company issues bonds with a contract rate less than the…
A: Discount on bonds payable = Market rate - Contract rate
Q: In terms of public offerings of bonds, what is an indenture? A) a list of the duties of a trust…
A: Bond: It acts between any investor and a company like a loan.
Q: Companies pay rating agencies to rate their bonds, and the costs can be substantial. However,…
A: As you have asked multiple questions, we will solve the first question as per policy. Request you to…
Q: The purpose of a discount price for bonds is to: Select one: a. Increase profits b. Compensate the…
A: solution Concept The bond is issued at discount when -the coupon rate is less than…
Q: pose that a profit-sharing plan has invested a substantial portion of your savings in your…
A: There are accounting practices to be followed to have faith of investors in the company but if not…
Q: Which of the following statements are true about unsecured bonds? I. Income bonds require interest…
A: Unsecured bonds are backed by the issuer's "full faith and credit," rather than a specific asset. In…
Q: When Tory invested in a mutual fund composed of bonds, her primary risk is that the bonds held by…
A: Mutual Funds: It's a financial vehicle having money pooled from the investors for purchasing…
Q: National governments issue debt securities known as sovereign bonds, which can be denominated in…
A: Note:Since, we are entitled to answer up to 3 sub-parts, we shall answer the first 3 as you have not…
Q: A debenture is ________. Group of answer choices A. a bond with assets such as land to back their…
A: Debentures are considered a financial instrument used to raise finance for the organization. It is…
Q: The bonds in which the name of the owners is not registered with the Corporation that issues them…
A: Bonds can be of different types
Q: Your business associate mentions that she is considering investing in corporate bonds currently…
A: Definition: Bonds are a kind of interest-bearing notes payable, usually issued by companies,…
Q: _____________________________ are issued certificates, where big corporations or governments act as…
A: Bonds are the instruments that represents a loan given by an investor to borrower in exchange of…
Q: The bond trustee is usually a bank that is hired to represent the interests of the bondholders,…
A: The bond trustee has a fiduciary responsibility to act on behalf of the issuer.
Q: The effective rate of interest on bonds is the interest rate specified on the bond certificate. is…
A: Introduction: A bond is a form of debt that the bond issuer owes to the bondholders. The common…
Q: A debenture is ________.A. the interest paid on a bondB. a type of bond that can be sold back to the…
A: The debentures are the financial instruments issued to raise money from the market.
Q: Indicate whether each of the following actions will increase or decrease a bond’s yield to maturity:…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Should financial institutions invest in junk bonds?
A: The answer for the theory question on junk bonds is discussed hereunder. Dear student, As you have…
Q: When Tory invested in a mutual fund composed of bonds, her primary risk is that the bonds held by…
A: Mutual Funds: It's an investment fund that manages a pool of money from investors for buying…
Q: 44) Which is the definition of a protective covenant? a) Bonds are repaid at maturity, where…
A: Protective covenants are certain clauses in bond indenture which will be limiting the actions of…
Q: A corporation decides to sell its newly issued bonds to pension funds and insurance companies, what…
A: A corporate bond is a debt instrument that a company issues and sells to investors. The company…
Q: Which is correct about debt securities? a. Debt securities make the holders owners and give them the…
A: a and c are not correct because debt securities holders are NOT the owners. They are lenders to the…
Q: The SEC attempts to protect investors who purchase newly issued securities by requiring issuers to…
A: Answer: The United State Securities and Exchange Commission (SEC) is created to educate people on…
Q: Held-to-maturity investments applies only to debt securities because ________. A. the…
A: Held to maturity investment applies only to debt securities because the investor tends to hold the…
Q: Which of the following statements regarding bonds is true? Group of answer choices a. Bonds are…
A: Bonds are common fixed income instruments issued by an organization to the investor.
Q: The following is not one of the principal types of securities underwritten by investment banks:…
A: Securities underwriting, which attempts to determine hazard and the acceptable value of specific…
Q: 1. A contract issued containing terms and conditions of the bond issued. a. debentures b.…
A: A company can raise funds in various different manners. It can issue bonds or it can go for private…
Q: A corporate bond indenture will usually include the following types of restrictive covenants except:…
A: Bond covenant - it is a term of agreement between issuer of bond and holder of bonds and such…
Q: A bond tends to pay a high interest rate if it isa. a short-term bond rather than a long-term…
A: Bonds are the financial instruments that are issued by various financial institutions for fixed time…
Q: Bonds that are rated less than investment grade by bond-rating agencies is: a. Sovereign bonds b.…
A: Bond is the fixed income securities which promises the holder future coupon payments.
Q: Series EE bonds are: OU.S, savings bonds that produce income that may be exempt from some taxes.…
A: The EE Bond Series (commonly referred to as the "Patriot Bond") is a U.S. government bond that can…
Q: Which type of bond has interest payments that are exempt from federal income taxes? A. Corporate…
A: A bond is a fixed income instrument. The bond holders are referred to as the debt-holders or…
Q: What are the advantages and disadvantages of buying bonds mutual funds?
A: Bond Mutual Fund is a pool of funds of small investors, where the fund manager invest the money of…
Q: Which of the following securities is least attractive for a pension fund? Corporate bonds…
A: Retirement is an important stage in your life. Everybody, whether self-employed or salaried, expects…
Q: Which of the following is a disadvantage to a corporation issuing bonds? Group of answer choices…
A: Disadvantages of issuing a bonds; (1) Since bonds are an increase in debt, they might adversely…
Q: Which of the following is not a capital market instrument? a. Corporate stock b. Mortgages c.…
A: A capital market is a marketplace for financial investments that are either direct or indirect…
Q: Why are government bonds considered safer to invest in as compared to corporate bonds?
A: A government bond is a government-issued financial asset that comprises US Treasury bonds and…
Q: 10. This refers to the process where the issuer directly sold the bonds only to qualified investors…
A: Issuer :- An issuer is one who issue financial secutities to the public, Goverment, banks, NBFC etc.…
Q: National governments issue debt securities known as sovereign bonds, which can be denominated in…
A: The definition of Sovereign Bond is as follows:Sovereign bond: It is a particular debt instrument…
Q: “An investor who purchases the mortgage bonds of a corporation knows that should the corporation…
A: “An investor who purchases the mortgage bonds of a corporation knows that should the corporation…
Q: What is a bond? A. It is a security that represents partial ownership in a business. B. It is a…
A: A bond refers to a fixed income instrument which is a financial instrument of indebtedness of the…
Q: Richard would like to invest on long-term debt securities, specifically bonds. Instruct Richard to…
A: The securities are issued by the company in order to fulfill its capital requirements. It helps the…
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- What are the pros and cons of U.S. savings bonds? What are some of the problems that individuals might face if they use one of the “problematic” financial institutions? What are some of the consumer protections available? What can individuals do to protect themselves? What are some of the advantages and disadvantages of choosing a federally-insured account? What are some considerations in choosing a financial institution?Which of the following securities has a component of liquidity risk premium? Long-term government bonds only since all entities that issued long-term securities may be default in payment. All types of government or corporate security because these constituted to be a liability in the part of the issuer. Long-term corporate security because corporations may find it hard to convert assets to cash for payment. All government bond because this type of security is presumed to be always liquid.A bond tends to pay a high interest rate if it isa. a short-term bond rather than a long-term bond.b. a municipal bond exempt from federal taxation.c. issued by the federal government rather than acorporation.d. issued by a corporation of dubious credit quality
- Bonds are fixed income securities issued by public authorities, credit institutions, companies and supranational institutions in the primary markets. The most common process for issuing bonds is through underwriting. When a bond issue is underwritten, one or more securities firms or banks, forming a syndicate, buy the entire issue of bonds from the issuer and re-sell them to investors. The security firm takes the risk of being unable to sell on the issue to end investors. Securitized bank lending such as credit card debt, car loans or mortgages can be structured into other types of fixed income products such as asset-backed securities which can be traded on exchanges just like corporate and government bonds. Required: Compute the dirty value or price of a bond five years after it had been issued with the following structures: market rate for bonds is 15%, coupon rate is 10%, maturity period is 10 years and face value is K2000. 2. Explain what it means, to a Treasurer, when a bond is…Bonds that are rated less than investment grade by bond-rating agencies is: a. Sovereign bonds b. Corporate bonds c. Junk bonds d. Contingency bondsWhich type of bond has interest payments that are exempt from federal income taxes? A. Corporate bonds B. Certificates of deposit C. Municipal bonds D. Treasury bonds
- Which of the following statements is CORRECT? a. Sinking fund provisions never require companies to retire their debt; they only establish "targets" for the company to reduce its debt over time. b. Most sinking funds require the issuer to provide funds to a trustee, who holds the money so that it will be available to pay off bondholders when the bonds mature. c. Sinking fund provisions sometimes turn out to adversely affect bondholders, and this is most likely to occur if interest rates decline after the bond was issued. d. If interest rates increase after a company has issued bonds with a sinking fund, the company will be less likely to buy bonds on the open market to meet its sinking fund obligation and more likely to call them in at the sinking fund call price. e. A sinking fund provision makes a bond more risky to investors at the time of issuance.A debenture is ________. Group of answer choices A. a bond with assets such as land to back their word that they will pay it back B. the interest paid on a bond C. a type of bond that can be sold back to the issuing company whenever the bondholder wishes D. a bond with only the company's word that they will pay it backWhich ot the following features would decrease the value of a corporate bond? A.The bond is sinior debt obligation B.The bond is convertible into shares C.The bond is secured by a mortgage on real estate D.The borrower has the option to repay the loan before maturity
- Which of the following statements regarding bonds is true? Group of answer choices a. Bonds are liabilities of the issuer. b. Individuals investing in bonds receive dividends. c. Bonds cannot be purchased or sold prior to maturity. d. Income from bonds varies every year. e. The principal invested in bonds is not returned at the time of maturity.What is a bond? A. It is a security that represents partial ownership in a business. B. It is a security that represents the debt of a government or a business that promises to pay a fixed amount. C. It is a security that represents the equity of a government or a business that promises to pay a fixed interest. D. None of the aboveWhich of the following is FALSE regarding bonds? The yield to maturity is the return an investor would earn if she buys the bond at the current price and holds it to maturity, collecting all of the promised coupon payments and the par value at maturity bond holders vote to elect members to the board of directors a bond indenture includes all of the basic terms of a bond issue bondholders have legal recourse if a company fails to make the promised interest payments or the par value at maturity corporate bonds usually have a fixed coupon rate with semi-annual interest payments.