Listed Below Are Some Provisions That Are Often Contained in Bond

question 60

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 restrict the use of additional debt.

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

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Definitions:

Sample Statistic

A numerical measurement describing some aspect of a sample taken from a population.

Gross Revenue

The total amount of revenue generated by a business before deductions for expenses are made.

Hypotheses Tests

A statistical method that is used to decide whether the data at hand sufficiently supports a particular premise or hypothesis.

Linearly Related

A relationship between two variables where a change in one variable is associated with a proportional change in the other.