The primary purpose of bond covenants is to protect the: a. general public b. lender c....
The primary purpose of bond covenants is to protect the:
a. general public
b. lender
c. borrower
d. bond issuer
e. firm's employees
Homework Answers
Bond covenants protect the interests of lenders by restricting furhther issue, preference over repayment etc. Bond covenants should informed to lender before bond issue.
Hence, correct option is b. lender.
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The primary purpose of bond covenants is to protect the:
a. general public
b. lender
c....
D Question 14 5 pts Protective covenants in a bond indenture protect the investor from interest...
D Question 14 5 pts Protective covenants in a bond indenture protect the investor from interest rate risk. the company in case of default. O bond investors from adverse actions by the company. O bond investors whose bonds are called by the company.
22- Which of the following statements is most correct? a. A venants in mortgage bond is one that allows the same assets to be used as security in future bond issues. b. Covenants in a trust indent...
22- Which of the following statements is most correct? a. A venants in mortgage bond is one that allows the same assets to be used as security in future bond issues. b. Covenants in a trust indenture restrict or limit the actions the firm c c. Retractable bonds can be redeemed prior to maturity by the firm. d. All of the above are correct. 23-Wh a. Setting reserve requirements b. Altering the discount rate, c. Through federal open market operations...
1. Two statements on bond indenture and covenants were made: Statement 1: "In the bond indenture,...
1. Two statements on bond indenture and covenants were made: Statement 1: "In the bond indenture, the trustee represents the interests of bondholders." Statement 2: "A bond issuer that is required to submit periodic reports to the trustee is an example of a negative covenant." A. Both statements are correct. B. Exactly one statement is correct. C. None of the statements are correct. 2. The coupon rate on a floater is: Coupon Rate = 5-year Treasury Yield - 100 Basis...
4. Money market funds invest mostly in: a. stocks b. long-term bonds c. short-term fixed income...
4. Money market funds invest mostly in: a. stocks b. long-term bonds c. short-term fixed income securities d. short-term stocks 5. Protective covenants associated with bond agreements: a. are designed to protect the bondholder b. are designed to protect the bond issuer c. are generally disclosed at bond maturity d. are not required but increase the risk of the bond issue 6. Mutual funds composed of stocks that have potential for very high growth, but may also be unproven, are...
. The purpose of the Federal Reserve is to a. protect investors from bank failures. b....
. The purpose of the Federal Reserve is to a. protect investors from bank failures. b. control the supply of money and credit. c. protect deposits from bank failures. d. finance government operations.
7) Which of the following 10-year, $10,000 face-value securities would you buy based on the yield...
7) Which of the following 10-year, $10,000 face-value securities would you buy based on the yield to maturity criterion? A) A 5 percent coupon bond selling for $10,100 B) A 10 percent coupon bond selling for $10,000 C) A 15 percent coupon bond selling for $10,000 D) A 15 percent coupon bond selling for $9,900 8) The future value of a security is A) inversely related to the market interest rate. B) directly related to the time until...
Shan Tung Merchandising Ltd. is required by its primary lender to maintain a current ratio of...
Shan Tung Merchandising Ltd. is required by its primary lender to maintain a current ratio of 2:1 in order to comply with its loan covenants. In the past, Shan Tung has had difficulty in achieving this target, but management is confident that in 2015 they will have met the bank's requirement. Shan Tung's accountant provides you with the following information taken from their most recent three years of financial statements.
Instructions:
a. Calculate Shan Tung's current ratio for each...
22) A bond whose coupon is less than the prevailing market rate on new issues is...
22) A bond whose coupon is less than the prevailing market rate on new issues is called a A) par bond. B) premium bond. C) discount bond.D) term bond 23) In the bond market, the buyer is considered to be A) the lender or the borrower, depending upon whether interest rates are rising or falling. B) the borrower. C) the lender or the borrower, depending upon the use to which the funds are put. D) the lender. 4) Which of...
24. The movement of money from the lender to the borrower and back to savers is...
24. The movement of money from the lender to the borrower and back to savers is known as a. The circle of life b. Corporate finance c. Managerial finance d. The cycle of money e. Money laundering
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B)...
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B) 2-year U.S. Treasury note C) Fed Funds D) 3-month U.S. Treasury bill 12) Debt instruments are also called: A) adjustable notes B) credit instruments C) perpetual securities D) interest rate swaps 13) Which of the following characteristic is NOT fixed on a coupon bond? A) Current yield B) Coupon rate C) Maturity D) Par amount 14) If you purchased a U.S. Treasury at a...
D Question 14 5 pts Protective covenants in a bond indenture protect the investor from interest rate risk. the company in case of default. O bond investors from adverse actions by the company. O bond investors whose bonds are called by the company.
22- Which of the following statements is most correct? a. A venants in mortgage bond is one that allows the same assets to be used as security in future bond issues. b. Covenants in a trust indenture restrict or limit the actions the firm c c. Retractable bonds can be redeemed prior to maturity by the firm. d. All of the above are correct. 23-Wh a. Setting reserve requirements b. Altering the discount rate, c. Through federal open market operations...
4. Money market funds invest mostly in: a. stocks b. long-term bonds c. short-term fixed income securities d. short-term stocks 5. Protective covenants associated with bond agreements: a. are designed to protect the bondholder b. are designed to protect the bond issuer c. are generally disclosed at bond maturity d. are not required but increase the risk of the bond issue 6. Mutual funds composed of stocks that have potential for very high growth, but may also be unproven, are...
Shan Tung Merchandising Ltd. is required by its primary lender to maintain a current ratio of 2:1 in order to comply with its loan covenants. In the past, Shan Tung has had difficulty in achieving this target, but management is confident that in 2015 they will have met the bank's requirement. Shan Tung's accountant provides you with the following information taken from their most recent three years of financial statements.
Instructions:
a. Calculate Shan Tung's current ratio for each...
22) A bond whose coupon is less than the prevailing market rate on new issues is called a A) par bond. B) premium bond. C) discount bond.D) term bond 23) In the bond market, the buyer is considered to be A) the lender or the borrower, depending upon whether interest rates are rising or falling. B) the borrower. C) the lender or the borrower, depending upon the use to which the funds are put. D) the lender. 4) Which of...
24. The movement of money from the lender to the borrower and back to savers is known as a. The circle of life b. Corporate finance c. Managerial finance d. The cycle of money e. Money laundering
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B) 2-year U.S. Treasury note C) Fed Funds D) 3-month U.S. Treasury bill 12) Debt instruments are also called: A) adjustable notes B) credit instruments C) perpetual securities D) interest rate swaps 13) Which of the following characteristic is NOT fixed on a coupon bond? A) Current yield B) Coupon rate C) Maturity D) Par amount 14) If you purchased a U.S. Treasury at a...
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