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Match the Term and the Definition

Question 107

Short Answer

Match the term and the definition.Not all definitions will be used.
_____ Convertibility
_____ Coupon rate
_____ Discount
_____ Callability
_____ Maturity
_____ Market interest rate
_____ Straight-line amortization
_____ Premium
A.A bond feature that changes the interest rate on the bond with market conditions.
B.When a bond is issued for a price less than its face value.
C.Also known as the face value or par value of a bond.
D.Refers to the percent of company debt that is long-term instead of current.
E.A bond feature that allows creditors to exchange the bond for company stock.
F.Spreads a bond discount or premium evenly over the lifetime of the bond.
G.Another name for the stated interest rate on a bond.
H.A bond feature that lets creditors examine financial data and demand new loan conditions.
I.The amount a company receives when it sells a bond; also known as issue price.
J.The face value of a bond multiplied by the percent of its life that has passed.
K.When a bond is issued for a price greater than its face value.
L.A bond feature that allows the borrowing company to pay off a bond whenever it wishes.
M.Also known as the yield of a bond.
N.The time at which the face value of a bond must be paid to the lender.
O.Is multiplied by the market interest rate to calculate the interest expense on a bond.
P.Spreads the face value of the bond evenly over the lifetime of the bond.
Q.The percent of interest expense that is actually paid out to the creditor.

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