2.1 Debt Securities Flashcards
1
Q
Issuing death Securities allows a business to get financing without
A
Deluding ownership and control
2
Q
A company that issues bonds promises to return a specific amount of money plus periodic interest to the bond purchaser by a certain date this date is called the
A
Maturity date or redemption date
3
Q
The term or maturity of a bond may range from
A
1 to 20 years
4
Q
Higher risk means higher
A
Coupon rates
5
Q
Nominal yield is also known as
A
The coupon rate
6
Q
The coupon rate is the
A
Percentage of principle that must be paid annually for the loan
7
Q
Long term bonds offer higher ____________ rates than short term bonds
A
Coupon
8
Q
Longer term bonds and lower credit ratings both mean what for the investor?
A
Higher risk
