Reference no: EM132976958
Problem 1: Corporations attempt to time their bond offerings when market interest rates are low, so that
A. Their cost of financing with bonds will be high.
B. Their cost of financing with bonds will be low.
C. The likelihood of securing a loan will be high.
D. The likelihood of securing a loan will be low.
Problem 2: Higher rated bonds can have a higher price (lower yield) because they are perceived to have a
A. Lower credit risk.
B. Higher credit risk.
C. Lower return.
D. Higher return.
Problem 3: A ______________________ is when the transaction will occur at the prevailing market price.
A. Limit order
B. Market order
C. Prevailing order
D. Prime order
Problem 4: A ________________________ is a requirement that firms retire a certain amount of the bonds issued each year.
A. Released fund market
B. Reliable fund allotment
C. Sinking fund provision
D. Sunk fund requirement
Problem 5: _________________ allows investors to exchange a bond for a stated number of shares of the firm's common stock.
A. Versatility
B. Variability
C. Conversability
D. Convertibility