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Match the Term and the Definition

Question 124

Matching

Match the term and the definition.Not all definitions will be used.

Premises:
Convertibility
Discount
Callability
Maturity
Premium
Market interest rate
Straight-line amortization
Coupon rate
Responses:
A bond feature that lets creditors examine financial data and demand new loan conditions.
A bond feature that allows the borrowing company to pay off a bond whenever it wishes.
Another name for the stated interest rate on a bond.
When a bond is issued for a price greater than its face value.
The face value of a bond multiplied by the percent of its life that has passed.
Spreads the face value of the bond evenly over the lifetime of the bond.
Also known as the yield of a bond.
Refers to the percent of company debt that is long-term instead of current.
Also known as the face value or par value of a bond.
Is multiplied by the market interest rate to calculate the interest expense on a bond.
The amount a company receives when it sells a bond; also known as issue price.
Spreads a bond discount or premium evenly over the lifetime of the bond.
A bond feature that changes the interest rate on the bond with market conditions.
The time at which the face value of a bond must be paid to the lender.
When a bond is issued for a price less than its face value.
The percent of interest expense that is actually paid out to the creditor.
A bond feature that allows creditors to exchange the bond for company stock.

Correct Answer:

A bond feature that lets creditors examine financial data and demand new loan conditions.
A bond feature that allows the borrowing company to pay off a bond whenever it wishes.
Another name for the stated interest rate on a bond.
When a bond is issued for a price greater than its face value.
The face value of a bond multiplied by the percent of its life that has passed.
Spreads the face value of the bond evenly over the lifetime of the bond.
Also known as the yield of a bond.
Refers to the percent of company debt that is long-term instead of current.
Also known as the face value or par value of a bond.
Is multiplied by the market interest rate to calculate the interest expense on a bond.
The amount a company receives when it sells a bond; also known as issue price.
Spreads a bond discount or premium evenly over the lifetime of the bond.
A bond feature that changes the interest rate on the bond with market conditions.
The time at which the face value of a bond must be paid to the lender.
When a bond is issued for a price less than its face value.
The percent of interest expense that is actually paid out to the creditor.
A bond feature that allows creditors to exchange the bond for company stock.
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