If a Company Anticipates a Substantive Decline in Interest Rates

question 49

Multiple Choice

If a company anticipates a substantive decline in interest rates in the future,which of the following are they likely to include in a bond?

• A)Par value
• B)Call feature
• C)Convertibility
• D)Reverse dividend

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Definitions:

Cash Sales

Transactions where payment is made in cash at the time of sale, immediately impacting a company's cash balance.

Deposits In Transit

Funds that have been deposited by a company but not yet recorded by the bank, leading to discrepancies in account balances.

Bank Debit Memo

A notice from a bank that decreases a customer's account balance due to charges like fees for service or for issuing a check without sufficient funds.

NSF Check

A check that has not been honored by the bank due to insufficient funds in the account of the issuer.