Which of the Following Statements Is CORRECT

question 61

Multiple Choice

Which of the following statements is CORRECT?

• A) subordinated debt has less default risk than senior debt.
• B) convertible bonds have lower coupon rates than non-convertible bonds of similar default risk because they offer the possibility of capital gains.
• C) junk bonds typically provide a lower yield to maturity than investment-grade bonds.
• D) a debenture is a secured bond that is backed by some or all of the firm's fixed assets.
• E) junior debt is debt that has been more recently issued, and in bankruptcy it is paid off after senior debt because the senior debt was issued first.

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Definitions:

Ribose

The 5-carbon sugar present in RNA and in important nucleoside triphosphates such as ATP.

Leader Sequences

Short sequences of amino acids at the beginning of the synthesis of a protein that signal where in the cell it should be localized.

Ribosomes

Cellular structures responsible for protein synthesis, found in both eukaryotic and prokaryotic cells.

Translation

The conversion of information provided by mRNA into a specific sequence of amino acids in a polypeptide chain; process also requires transfer RNA and ribosomes.