Listed Below Are Some Provisions That Are Often Contained in Bond

question 108

Multiple Choice

Listed below are some provisions that are often contained in bond indentures. Which of these provisions, viewed alone, would tend to REDUCE the yield to maturity that investors would otherwise require on a newly issued bond? 1. Fixed assets are used as security for a bond.
2) A given bond is subordinated to other classes of debt.
3) The bond can be converted into the firm's common stock.
4) The bond has a sinking fund.
5) The bond has a call provision.
6) The indenture contains covenants that prevent the use of additional debt.

• A) 1, 3, 4, 6
• B) 1, 4, 6
• C) 1, 2, 3, 4, 6
• D) 1, 3, 4, 5, 6

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Definitions:

Managerial Selection

The process of identifying, evaluating, and hiring individuals to fill managerial positions within an organization, considering the skills and attributes necessary for effective leadership.

Variety of Tasks

The range of different responsibilities and activities an employee may be required to perform in their job.

Structured Interview

An interview technique where each candidate is asked the same predetermined set of questions to ensure fairness and comparability in the hiring process.

Identical Questions

Questions that are exactly the same in wording and meaning, often used in surveys or tests for consistency.