Karyn Wants to Evaluate Some Bonds She Is Contemplating Buying

question 126

Multiple Choice

Karyn wants to evaluate some bonds she is contemplating buying.In order to adequately evaluate them,she should check the bond yields,read the bond quotes in a paper,and check the

• A)par values.
• B)bond ratings.
• C)company rating.
• D)company's performance.

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Definitions:

Expected Return

The anticipated return on an investment based on the probabilities of achieving certain returns, factoring in all possible outcomes.

Bankruptcy Laws

Statutes that govern the process through which individuals or businesses unable to meet their financial obligations can seek relief from some or all of their debts.

Coupon Rate

The interest rate stated on a bond or other fixed-income security, represented as a percentage of the principal amount.

Restrictive Covenants

Clauses in a contract that limit certain actions of the parties involved, often used in employment agreements and loan documents to protect business interests.