Which of the Following Constitute Default on a Bond

question 45

Multiple Choice

Which of the following constitute default on a bond?

• A)nonpayment of par value
• B)nonpayment of coupon
• C)violation of the indenture
• D)all the above
• E)none of the above

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Definitions:

Usury Laws

Regulations that set maximum interest rates which can be charged on loans, to protect borrowers from excessively high rates.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the principal, paid to lenders over a period.

Real Rate of Return

The rate of profit or loss on an investment after adjusting for inflation, providing a more accurate measure of purchasing power.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.