Adding Warrants as a "Sweetener" to Bonds Will

question 31

Multiple Choice

Adding warrants as a "sweetener" to bonds will:

• A) reduce the value of the bond.
• B) increase the coupon rate of the bond.
• C) increase the value of the bond.
• D)make the bond riskier.

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Definitions:

Conditioned Response

A response acquired through learning to a stimulus that was initially neutral, but has been paired with an unconditioned stimulus via conditioning.

Conditioned Stimulus

A previously neutral stimulus that, after being repeatedly associated with an unconditioned stimulus, elicits a conditioned response.

Unconditioned Stimulus

In traditional conditioning, a stimulus that instinctively and automatically elicits a response without previous learning.

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without any prior learning or conditioning.