Misterm 2 Practice Quiz Flashcards
1
Q
At the time a bond is issued, its coupon rate is set to equal
A
The markets required return
2
Q
The call feature in a bond contract tends to benefit
A
The lender and issued of the bond
3
Q
What does a protective or restrictive covenant do?
A
Limits the actions of the borrower
4
Q
Which of the following is likely to have the least default risk?
Mortgage debt
Unsecured subordinate debt
A U.S treasury bill
Corporate senior debt with AA credit rating
A
A US treasury bill
5
Q
What compensates investors when a bond cannot be sold quickly without losing market value?
A
Liquidity premium
6
Q
A company sells shares off stock in the primary market for the first time
A
IPO
7
Q
Which are examples of secondary markets
- NYSE
- NASDAQ
- IPO
- Both 1 and 2
A
NYSE
NASDAQ
