Question
1. In the event that a corporation files for bankruptcy, bond trustees have the power to a. change the interest rate on outstanding bonds. b.
1. In the event that a corporation files for bankruptcy, bond trustees have the power to
a. change the interest rate on outstanding bonds.
b. sell the corporations secured assets and use the proceeds to pay the bondholders.
c. recall outstanding bonds.
d. issue new bonds
2. Alice recently bought dozens of collectable Barbie dolls. What ultimately will determine the investment value of Alice's Barbies when she goes to resell them?
a. Its return
b. Its cost
c. Book value
d. Supply and demand
e. None of these
3. What are the disadvantages associated with investing directly in real estate?
a. Increasing property taxes and insurance costs
b. Large investment of time and energy required
c. Illiquidity
d. All of these are correct
e. Only Increasing property taxes and insurance costs and Illiquidity are correct.
4. Because junk bonds carry a much higher risk of default, they also carry an interest rate ________ percent above the AAA grade long-term bonds.
a. 10-12
b. 7-9
c. 1-2
d. 3-6
e. 20-25
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