What Can Protect Investors from Having Debt with an Attractive

question 6

Multiple Choice

What can protect investors from having debt with an attractive yield refinanced before maturity?

• A)Floating interest rate
• B)Fixed interest rate
• C)PIK
• D)Call premium

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Definitions:

Negotiability

The ability of a document or instrument to be legally and freely transferred from one party to another.

Instrument Dishonored

A legal term for when a negotiable instrument (like a check or promissory note) is not honored or paid upon presentation.

Insufficient Funds

A situation where an account does not have enough money to cover transactions, leading to declined payments or penalties.

Delivery

In contract law, the process of transferring the possession of a good or document from one party to another, completing the transaction.