A. To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: • A bond’s is generally $1,000 and represents the amount borrowed from the bond’s first purchaser. • A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants. • The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called . • A bond’s gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions. Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information: Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00 B. What is the maturity date of this bond? 7-15-2055 7-15-2005
A. To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: • A bond’s is generally $1,000 and represents the amount borrowed from the bond’s first purchaser. • A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants. • The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called . • A bond’s gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions. Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information: Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00 B. What is the maturity date of this bond? 7-15-2055 7-15-2005
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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2. Characteristics of bonds
A. To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential.
For example:
| • | A bond’s is generally $1,000 and represents the amount borrowed from the bond’s first purchaser. |
| • | A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants. |
| • | The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called . |
| • | A bond’s gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions. |
Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information:
Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00
B. What is the maturity date of this bond?
7-15-2055
7-15-2005
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