Matching
Match the following definitions with the appropriate term
Premises:
An obligation requiring a series of periodic payments to the lender.
Bonds that are payable to whoever holds them; also called unregistered bonds.
Bonds that are backed by the issuer's general credit standing
Bonds that are scheduled for maturity on one specified date.
The contract between the bond issuer and the bondholders; it identifies the rights and obligations of the parties.
An accounting method that allocates interest expense over the bonds' life in a way that yields a constant rate of interest.
Bonds with interest coupons attached to their certificates; the bondholders detach the coupons when they mature and present them to a bank or broker for collection.
The interest rate that borrowers are willing to pay and lenders are willing to accept for a particular bond at its risk level.
Bonds that can be exchanged by the bondholders for a fixed number shares of the issuing corporation's common stock.
Bonds that mature at more than one date and are usually paid over a number of periods.
Responses:
Term bonds
Coupon bonds
Market rate
Bond indenture
Convertible bonds
Bearer bonds
Installment note
Unsecured bonds
Serial bonds
Effective interest rate method
Correct Answer:
Premises:
Responses:
An obligation requiring a series of periodic payments to the lender.
Bonds that are payable to whoever holds them; also called unregistered bonds.
Bonds that are backed by the issuer's general credit standing
Bonds that are scheduled for maturity on one specified date.
The contract between the bond issuer and the bondholders; it identifies the rights and obligations of the parties.
An accounting method that allocates interest expense over the bonds' life in a way that yields a constant rate of interest.
Bonds with interest coupons attached to their certificates; the bondholders detach the coupons when they mature and present them to a bank or broker for collection.
The interest rate that borrowers are willing to pay and lenders are willing to accept for a particular bond at its risk level.
Bonds that can be exchanged by the bondholders for a fixed number shares of the issuing corporation's common stock.
Bonds that mature at more than one date and are usually paid over a number of periods.
Premises:
An obligation requiring a series of periodic payments to the lender.
Bonds that are payable to whoever holds them; also called unregistered bonds.
Bonds that are backed by the issuer's general credit standing
Bonds that are scheduled for maturity on one specified date.
The contract between the bond issuer and the bondholders; it identifies the rights and obligations of the parties.
An accounting method that allocates interest expense over the bonds' life in a way that yields a constant rate of interest.
Bonds with interest coupons attached to their certificates; the bondholders detach the coupons when they mature and present them to a bank or broker for collection.
The interest rate that borrowers are willing to pay and lenders are willing to accept for a particular bond at its risk level.
Bonds that can be exchanged by the bondholders for a fixed number shares of the issuing corporation's common stock.
Bonds that mature at more than one date and are usually paid over a number of periods.
Responses:
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