A) the zero-coupon Treasury issues,with maturities that range from one month to one year at issue.
B) the coupon-paying issues with maturities from one year to 10 years at their initial issue date.
C) the coupon-paying issues with maturities from one year to 5 years at their initial issue date.
D) the coupon-paying issues with maturities greater than 10 years at their issue date.
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A) are beneficial in preventing a manager from leaving bondholders penniless by liquidating the firm and paying out the proceeds to themselves and shareholders.
B) prevent the firm from promiscuously issuing new debt,which would dilute the claims of existing bondholders to the firm?s assets.
C) are beneficial to bondholders as they require that a certain portion of the bonds be retired before maturity.
D) give the bondholder the option to convert the bond into another security,typically the ordinary equity of the firm issuing the convertible bond.
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A) the date on which the bondholder becomes entitled to the coupon.
B) the last day on which a bond can be traded on the secondary market.
C) is the preceding day of the first principal payment to the bondholder.
D) is the date of legal exchange of cash for bonds.
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1.They are issued on a floating-rate bas...View Answer
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A) the lessee cannot return the asset except with substantial penalties
B) it is difficult to find the appropriate discount rate
C) of the uncertainty about the length of the lease
D) it is difficult to predict the cash flows.
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C
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A) Debt instruments
B) Futures
C) Option contracts
D) Swap contracts
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A) securitization
B) portfolio management
C) amortization
D) collateralization
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A) Cash flow yield
B) Current yield
C) Yield to maturity
D) Bond-equivalent yield
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A) Maturity
B) Duration
C) Covenant
D) Convexity
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A) It gives the bondholder the option to convert the bond into another security,typically the ordinary equity of the firm issuing the convertible bond.
B) It gives the issuing firm an option to convert the bond into another security,typically the ordinary equity of the firm issuing the convertible bond.
C) It mandates a conversion of the regular bonds into another security,typically the ordinary equity of the firm issuing the convertible bond,on maturity.
D) It is similar to a perpetuity and mandates a conversion of the regular bonds into another bond subsequently issued by the firm immediately after maturity.
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A) Whether the lease should be expensed or capitalized
B) Time period for which the lessee can use the asset
C) Depreciation method of the leased asset.
D) Retention ratio of the firm.
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B
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A) Aa3 and above by Moody's,and AA- and above for S&P and Fitch ratings.
B) A1 and above by Moody's,and A- and above for S&P and Fitch ratings.
C) Baa and above by Moody's,and CCC and above for S&P and Fitch ratings.
D) Baa and above by Moody's,and BBB and above for S&P and Fitch ratings.
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D
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Asset-backed securities (ABS) are financ...View Answer
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The Eurobond market has seen spectacular...View Answer
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A) They are zero-coupon bonds issued by the European Central Bank.
B) They are sold outside the country in whose currency it is denominated.
C) They are sovereign bonds issued by European countries.
D) They are Euro-denominated bonds issued by corporations.
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A) the coupon rate is set lower than the coupon rate of par bonds of same maturity and credit risk.
B) the quoted price exceeds the face value of the bond.
C) the quoted price equals the face value of the bond.
D) the face value exceeds the quoted price of the bond.
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A) It is a short-term,zero-coupon note issued by major corporations.
B) It is an arrangement in which the firm is allowed to pay down the loan and then subsequently increase the amount of borrowing.
C) It is an arrangement where the bank will lend up to a maximum pre-specified loan amount at a pre-specified interest rate,as long as the firm meets the requirements established initially.
D) It is an arrangement with a bank whereby the bank authorizes the maximum loan amount,but not the interest rate,when commitment was drawn up.
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A) Mortgage bond
B) Equipment trust certificate
C) Debenture
D) Collateral trust bond
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Asset covenants Dividend coven...View Answer
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