1. Both bonds payable and notes payable are obligations that usually arise from borrowing money. This statement is

A. True

B. False

2. Which of the following entities recevies cash when a company borrows money through a bond issue?

A. Bondholder

B. Lender

C. Issuer

D. Resource Provider

3. The lender issues a bond certificate to the borrower. This statement is

A. True

B. False

4. Which of the following items is normally included in a bond certificate issued by a corporation?

A. The face value of the bond

B. The stated rate of interest

C. The term to the maturity date

D. All of the answers represent items that are normally included in a corporate bond certificate

5. A callable bond provides an option

A. For the issuer to repay the bond liability before the maturity date

B. For the issuer to extend the maturity date

C. For the lender to demand payment of the bond liability before the maturity date

D. For the lender to extend the maturity date

6. A provision of a bond certificate that requires a sinking fund is designed to protect the

A. Issuer

B. Federal Government

C. Lender

D. Borrower

7. A convertible provision in a bond certificate normally allows the

A. Issuer to convert a fixed interest rate to a varialbe interest rate

B. Borrower to convert short-term debt to long-term debt

C. Issuer's Chef Executive Officer (CEO) to convert stock option to debt

D. Bondholder to convert the bond investment into common stock investment

8. Limiting the amount of funds that a bond issuer can borrow to a specified percentage of total assests is an example of

A. A sinking fund provision

B. A convertible feature

C. A callable feature

D. A restrictive covenant