$2.$ Characteristics of bonds To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential For example: A bond'srefers to the interest payment or payments paid by a bond A bond issuer is said to be inif 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 allows a bondholder or preferred stockholder to convert their bond or preferred share, respectively, into a specified number or value of common shares Suppose you read an article about the Golden Gate Badge and Highway District bondsIt includes the following information Bridge Bonds Series A Dated $7-15-20054\mathrm{.}375\%$ Due $7-15-2055100\mathrm{.}00$ What is the coupon interest rate of this bond? $4\mathrm{.}375\%0\mathrm{.}435\%$ the coupon interest rate is $4\mathrm{.}375\%$ for the first six months and changes to a rate equal to the $10-$year Treasury bond rate plus $1\mathrm{.}3\%$ thereafter, the bond is called a bond. 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 the