Question 1

1a)

Select one option from the parentheses

A bonds (price/par value/ coupon payment) refers to its face value and the amount of money that the issuing entity borrows and promises to repay on the maturity date.
	A bond issuer is said to be in (default/liquidation/bankruptcy) if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issues restrictive covenants.
	A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a (sinking fund provision/call provision/ convertible provision) .
	A bonds (convertibility provision/call premium/call provision) allows a bondholder or preferred stockholder to convert their bond or preferred share, respectively, into a specified number or value of common shares.

1b)

Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information:

Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00

What is the issuing date of this bond?

If the coupon interest rate remains constant from the time of issue until the bond matures, then the bond is called a ( (floating-rate/fixed-rate) bond.

1c)

Which feature of a bond contract allows the issuer to redeem a bond issue immediately in its entirety at an amount greater than par value prior to maturity?

Which term is used to describe a call provision in which the issuer is prevented from calling a portion or the entire issue for several years during the early years of the bond issue?

Call provision

Sinking fund provision

Deferred call provision

Put provision