FIN 380 - Exam 2 – Witte QUESTIONS WITH
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ANSWERS
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Bonds - CORRECT ANSWERS ✔✔are a long term debt instruments
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that are issued by companies or government entities
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The bond issuer promises to pay the bondholder (investor) a sum
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of money upon the bond's _________ (the end of the bonds title). -
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CORRECT ANSWERS ✔✔maturity
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The amount paid upon the maturity of a bond is the _______ or
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_______ of the bond; will assume that bond's have a $1000 par
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value unless told otherwise. - CORRECT ANSWERS ✔✔par value,
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face value |\
Many bonds also make periodic interest or _________. - CORRECT
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ANSWERS ✔✔Coupon payments |\ |\
Coupon bonds - CORRECT ANSWERS ✔✔the term for bonds that
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promise to make periodic interest payments in addition to the
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par value payment
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Zero coupon bonds - CORRECT ANSWERS ✔✔the term for bonds
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that do not make periodic interest payments but only promise to
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make the pay value payment at maturity
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, Mortgage bonds - CORRECT ANSWERS ✔✔are bonds that are
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secured - the issuer pudges specific assets such as real estate
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when mortgage bonds are issued in order to provide the
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investors some guarantee that the issuer will make the promised
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payments when due |\ |\
Debentures - CORRECT ANSWERS ✔✔are unsecured long-term |\ |\ |\ |\ |\ |\ |\
debt which means that no specific assets are pledged as
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collateral to back them up to guarantee payments
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Subordinated Debentures - CORRECT ANSWERS ✔✔are |\ |\ |\ |\ |\ |\
debentures (unsecured long-term debt) that have a portion|\ |\ |\ |\ |\ |\ |\ |\
below/after, or subordinate to other debentures when receiving|\ |\ |\ |\ |\ |\ |\ |\
promised payments |\
Registered bonds - CORRECT ANSWERS ✔✔are bonds that require
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the owner's identity to be on file or "registered" with the issuer
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
to facilitate payment of par value and interest payments
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Bearer bonds - CORRECT ANSWERS ✔✔are bonds where par
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value and interest payments are made to whomever possesses
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(bears) the physical bond certificate or coupon(s)
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Eurobonds - CORRECT ANSWERS ✔✔are bonds issued in a|\ |\ |\ |\ |\ |\ |\ |\ |\
country different from one in whose currency the bond is
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denominated
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ANSWERS
|\
Bonds - CORRECT ANSWERS ✔✔are a long term debt instruments
|\ |\ |\ |\ |\ |\ |\ |\ |\
that are issued by companies or government entities
|\ |\ |\ |\ |\ |\ |\ |\
The bond issuer promises to pay the bondholder (investor) a sum
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
of money upon the bond's _________ (the end of the bonds title). -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔maturity
|\ |\ |\
The amount paid upon the maturity of a bond is the _______ or
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
_______ of the bond; will assume that bond's have a $1000 par
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
value unless told otherwise. - CORRECT ANSWERS ✔✔par value,
|\ |\ |\ |\ |\ |\ |\ |\ |\
face value |\
Many bonds also make periodic interest or _________. - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Coupon payments |\ |\
Coupon bonds - CORRECT ANSWERS ✔✔the term for bonds that
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
promise to make periodic interest payments in addition to the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
par value payment
|\ |\
Zero coupon bonds - CORRECT ANSWERS ✔✔the term for bonds
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
that do not make periodic interest payments but only promise to
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
make the pay value payment at maturity
|\ |\ |\ |\ |\ |\
, Mortgage bonds - CORRECT ANSWERS ✔✔are bonds that are
|\ |\ |\ |\ |\ |\ |\ |\ |\
secured - the issuer pudges specific assets such as real estate
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
when mortgage bonds are issued in order to provide the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
investors some guarantee that the issuer will make the promised
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
payments when due |\ |\
Debentures - CORRECT ANSWERS ✔✔are unsecured long-term |\ |\ |\ |\ |\ |\ |\
debt which means that no specific assets are pledged as
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
collateral to back them up to guarantee payments
|\ |\ |\ |\ |\ |\ |\
Subordinated Debentures - CORRECT ANSWERS ✔✔are |\ |\ |\ |\ |\ |\
debentures (unsecured long-term debt) that have a portion|\ |\ |\ |\ |\ |\ |\ |\
below/after, or subordinate to other debentures when receiving|\ |\ |\ |\ |\ |\ |\ |\
promised payments |\
Registered bonds - CORRECT ANSWERS ✔✔are bonds that require
|\ |\ |\ |\ |\ |\ |\ |\
the owner's identity to be on file or "registered" with the issuer
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
to facilitate payment of par value and interest payments
|\ |\ |\ |\ |\ |\ |\ |\
Bearer bonds - CORRECT ANSWERS ✔✔are bonds where par
|\ |\ |\ |\ |\ |\ |\ |\ |\
value and interest payments are made to whomever possesses
|\ |\ |\ |\ |\ |\ |\ |\ |\
(bears) the physical bond certificate or coupon(s)
|\ |\ |\ |\ |\ |\
Eurobonds - CORRECT ANSWERS ✔✔are bonds issued in a|\ |\ |\ |\ |\ |\ |\ |\ |\
country different from one in whose currency the bond is
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
denominated
