Exam 7: Bond Markets

Which of the following is not mentioned in your text as a protective covenant?

Which of the following would not be a likely example of a protective covenant provision?

Jim purchases $10,000 par value bonds with a 10 percent coupon rate and a 7 percent yield to maturity. Jim will hold the bonds until maturity. Thus, he will earn a return of ____ percent.

Bonds are issued in the primary market through a telecommunications network.

____ are not primary purchasers of bonds.

Rule 144A creates liquidity for securities that are privately placed.

Rule 144A allows small individual investors to trade privately placed bonds (and some other securities) with each other without requiring the firms that issued the securities to register themwith the SEC.

The Financial Reform Act of 2010 established the __________ to provide oversight for credit rating agencies.

A variable-rate bond allows

Bond dealers specialize in small transactions (less than $100,000) in order to enable small investors to trade bonds.

All of the bonds issued by a particular company will have the same maturity, price, and credit rating.

Bonds issued by ____ are backed by the federal government.

The primary investors in bond markets are institutional investors such as commercial banks, bond mutual funds, pension funds, and insurance companies.

A call provision on bonds normally