Exam 3 - Chapter 10 [SLIDES] Flashcards
Indenture
[important]
Is the contract between the issuer and the bond holder
Face or par value is typically $___
1000
Face or par value
The principal repaid at maturity
The _____ ____ determines the interest payamenet
Coupon rate
Interest is usually paid _____
Semiannually
The coupon rate can be ____
Zero
Interest payments are called “_______ _____”
Coupon payments
Covenants
Not maturity is
1-10 years
Bond maturity is
10-30 years
Bonds and notes can be purchased directly from the ____
Treasury
Quoted price of 100:08 means
100 8/32 or 1002.50
30 second is
Face value
Quoted price needs to be converted into ____ price
Invoice
Corporate bonds
3 options he talked about (option features are added)
- Callable bond
- Convertible bond
- Puttable bonds
Callable bonds
Callable bonds can be called back before the maturity date
Convertible bonds
Convertible bonds can be exchanged for shares fo th efirm’s common stocks
Puttable bonds
Puttable bonds give the bond holder the option to retire or extend the bond
Floating rate can adjust what
Floating rate bonds have an adjustable coupon rate
Defaultable
Quality: Bond grading
What type of bond has no features or options
Straight Bond
You get a higher ______ on straight bonds
Rate of return
Foreign bonds
- Issue by a borrower from a country other the one in which the bond is sold
- bonds are dominated in the currency of the country in which it is sold
- yankee, bonds, samurai bonds, bulldog bonds
Eurobonds
Bonds issued in the company of one country but sold in other national markets
- Eurodollar bonds, euro yen bonds
