Question: Match the terms associated with bonds on the left with the descriptions of the terms on the right. Read each description carefully and type the
Match the terms associated with bonds on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term.
These are not necessarily complete definitions, but there is only one correct description for each term.
| Coupon | A. | This type of bonds are issued as a group of bonds which mature in increments. The coupon rate applied to each incremental bond may be different as well. | |
| Equipment Trust Certificate | B. | This type of bond refers to municipal bonds that intend to make payments to its bondholders with the income generated from the project, for which the bond was issued. | |
| Sinking fund | C. | This term is used to refer to an unsecured bond issued on the general credit of the issuing entity. | |
| Call feature | D. | Investors use this security issued by the U.S. government to get protection from the negative effects of inflation since this security provides returns that are periodically adjusted with rates of inflation. | |
| Debenture | E. | This term defines the proportion specifying the number of shares of common stock into which convertible bonds can be converted. | |
| Treasury inflation-indexed bond | F. | This term is used to state the quoted value of a bond but does not include the value of any accrued interest that bondholders would earn. | |
| Serial obligation | G. | This is a bond provision that specifies the annual repayment schedule that will be used to service the bond and pay off the debt. | |
| Revenue bond | H. | This term defines the annual interest income that the bond issuer pays to the bondholder. | |
| Conversion ratio | I. | This term is used to define the part of the bond which states the agreement between the issuer and the buyer describing the schedule and price of retiring the bond before maturity. | |
| Clean price | J. | This type of bond is issued to finance a specific asset such as machinery, trains etc. and is backed by the asset |
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