Question 9

1. Protective covenants:
   1. Only apply to bonds that have a deferred call provision.
   2. Only apply to privately issued bonds.
   3. Are a feature found only in government-issued bond indentures.
   4. Are primarily designed to protect bondholders.
   5. Apply to short-term debt issues but not to long-term debt issues.

Question 10

1. Wine and Roses, Inc. offers a 10.0 percent coupon bond with semiannual payments and a yield to maturity of 11.00 percent. The bonds mature in 9 years. What is the market price of a $1,000 face value bond?
   1. $1,506.07
   2. $1,562.30
   3. $943.77
   4. $1,076.69
   5. $1,381.47

Question 11

1. The items included in an indenture that limit certain actions of the issuer in order to protect a bondholder's interests are referred to as the:
   1. Legal bounds
   2. Bylaws
   3. Trust deed
   4. Trustee relationships
   5. Protective convenants

Question 12

1. You want to have $2 million in real dollars in an account when you retire in 43 years. The nominal return on your investment is 9.939 percent and the inflation rate is 3.2 percent. What is the real amount you must deposit each year to achieve your goal?
   1. $9,711
   2. $10,878
   3. $9,210
   4. $10,403
   5. $8,887