Which of the Following Situations Would Require an Increase in the Coupon

question 36

Multiple Choice

Which of the following situations would require an increase in the coupon rate for a bond selling at par?

• A)The addition of a call provision
• B)The addition of a convertibility option
• C)The increase in the rating from BBB to AA
• D)The addition of sinking fund provision
• E)All of these choices are correct.

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Definitions:

Basking In Reflected Glory

The tendency to enhance one’s image by publicly announcing one’s association with those who are successful.

Robert Cialdini

An American psychologist known for his work on the psychology of persuasion, compliance, and negotiation.

Self-handicapping

A cognitive strategy whereby individuals create obstacles and excuses for themselves to avoid self-blame when they do poorly.

Self-handicapping

A cognitive strategy by which people avoid effort in the hopes of keeping potential failure from hurting self-esteem.