Of the Following Provisions That Might Be Found in a Bond

question 1

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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