Podcast
Questions and Answers
What does it mean when a $100 face value bond sells for $110 in the market?
What does it mean when a $100 face value bond sells for $110 in the market?
- The bond is selling at a discount because the market expects high inflation.
- The bond is selling at a premium because the market expects low inflation.
- The bond is selling at a discount because the market expects low inflation.
- The bond is selling at a premium because the market expects high inflation. (correct)
In the context of Corporate Bonds, what distinguishes First Mortgage Bonds from Second Mortgage Bonds?
In the context of Corporate Bonds, what distinguishes First Mortgage Bonds from Second Mortgage Bonds?
- Second Mortgage bonds are unsecured debt.
- First Mortgage bonds have the first claim to the assets. (correct)
- First Mortgage bonds are paid after all Second Mortgage bonds are repaid.
- Second Mortgage bonds have specific assets as collateral.
What determines the credit ratings or worthiness of Corporate Debentures?
What determines the credit ratings or worthiness of Corporate Debentures?
- Market expectations of inflation.
- The face value of the debenture.
- Company's cash flow and unencumbered assets. (correct)
- The company's stock price.
What is the characteristic of Subordinated Debentures compared to other forms of debt?
What is the characteristic of Subordinated Debentures compared to other forms of debt?
What happens to a corporation's Commercial Paper when it is guaranteed by a bank?
What happens to a corporation's Commercial Paper when it is guaranteed by a bank?
How do Strip Bonds differ from traditional corporate debt instruments?
How do Strip Bonds differ from traditional corporate debt instruments?
What is the premium or discount for bonds that are priced at $90 per $100 of face value?
What is the premium or discount for bonds that are priced at $90 per $100 of face value?
Which type of bonds have maturities ranging from 5 to 10 years?
Which type of bonds have maturities ranging from 5 to 10 years?
What type of bond has a coupon rate that adjusts periodically based on market rates?
What type of bond has a coupon rate that adjusts periodically based on market rates?
Which of the following bond features allows the issuer to repurchase the bond before the maturity date?
Which of the following bond features allows the issuer to repurchase the bond before the maturity date?
What type of interest income are price changes considered for tax purposes?
What type of interest income are price changes considered for tax purposes?
Which of the following statements is true regarding the bond market and the equity market?
Which of the following statements is true regarding the bond market and the equity market?
What is the usual par or face value of a bond?
What is the usual par or face value of a bond?
What does it mean when a bond is sold at a discount?
What does it mean when a bond is sold at a discount?
What is the difference between a bond and a debenture?
What is the difference between a bond and a debenture?
What does it mean when a bond is sold at a premium?
What does it mean when a bond is sold at a premium?
What is a bond coupon rate?
What is a bond coupon rate?
What is bond maturity?
What is bond maturity?
