Listed Below Are Some Provisions That Are Often Contained in Bond

question 26

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. $\text {Fixed assets are used as security for a bond.}$
2. $\text {A given bond is subordinated to other classes of debt.}$
3. $\text {The bond can be converted into the firm's common stock.}$
4. $\text {The bond has a sinking fund.}$
5. $\text {The bond has a call provision.}$
6. $\text {The indenture contains covenants that restrict the use of additional debt.}$

• 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:

Multiaxial

Characterized by movement or rotation around multiple axes, often used to describe joints in the human body.

Ball-and-Socket

A Ball-and-Socket joint is a type of synovial joint where a ball-shaped head of one bone fits into a concave socket of another, allowing multidirectional movement and rotation.

Plane Joint

A type of synovial joint that allows for only gliding movement in various planes, commonly found in the carpals of the wrist.

Opposition

The movement that involves bringing the thumb and a finger together.