Of the Following Provisions That Might Be Found in a Bond

question 45

Multiple Choice

Of the following provisions that might be found in a bond indenture,which would tend to reduce the coupon interest rate?

• A) A call provision
• B) No restrictive covenants
• C) A sinking fund provision
• D) Change in bond rating from Aaa to Aa
• E) None of the above (that is, all will increase the coupon rate)

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Definitions:

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Flexible tubes made from latex, often used in medical, laboratory, and industrial settings.

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The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes associated with maintaining the business.

Bill

A statement of money owed for goods sold or services provided, presented to a purchaser by a vendor.

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A cultivar of the species Capsicum annuum, noted for its sweet taste and vibrant red color, commonly used in cooking and salads.