Of the Following Provisions That Might Be Found in a Bond

question 45

Multiple Choice

Of the following provisions that might be found in a bond indenture,which would tend to reduce the coupon interest rate?

• A) A call provision
• B) No restrictive covenants
• C) A sinking fund provision
• D) Change in bond rating from Aaa to Aa
• E) None of the above (that is, all will increase the coupon rate)

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Definitions:

Sarbanes-Oxley Act

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The method of generating reports that reveal the financial condition of an organization to its management, investors, and governmental authorities.

Top Executives

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Autocratic Control

Refers to a management style where decision-making powers are centralized in the hands of one individual, with little to no input from subordinates.