Earnings on a Private College's Endowment Investments May Increase Net

question 46

True/False

Earnings on a private college's endowment investments may increase net assets without donor restrictions or net assets with donor restrictions, or both.

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Definitions:

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price.

Call Option

A call option is a financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.

Convertible Bond

A type of bond that can be converted into a predetermined number of the issuing company's shares, typically at the discretion of the bondholder.

Convertible Bonds

Financial instruments that can be converted into a specified number of common stock shares at the discretion of the bondholder, usually at certain times during their life.