1. A bond issue may be retired by:

calling the bonds if there is a call feature.

converting the bonds (if convertible) into common stock.

making a single-sum payment at final maturity.

all of the above.

2. Protective covenants are:

to protect employees.

to protect the interests of the company.

to protect shareholders.

to protect bondholders.

3. Which of the following bonds offer the investor the most protection?

First-mortgage bonds

Debentures

Subordinated debentures

Income bonds

4. A company refunds its bonds for any of the following reasons EXCEPT for:

to eliminate restrictive covenants.

to reduce interest costs.

to show higher reported profits.

to issue new bonds at higher rate of interest.