2. Characteristics of bonds To be effective issuing and investing in bonds, knowledge of their teminology, characteristics, and features is essential. For example: - A bond's refers to the interest payment or payments paid by a bond. - 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 vialates one or more of the issue's restrictive covenants. - The contract that descrites 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 specafic times and under specific conditions. Suppose you read an article about the Golden cate Bndge and Highway District bonds. If'includes the following information: Bridge Bonds Series A Dated 7-15-2005 4.375\% Due 7-15-2055 e100.00 What is the coupon interest rate of this bond? 4.375% 0.4359 If the price of the bond is initially discounted and offers no coupon payments, the bond is called a bond. What is the coupon interest rate of this bond? 4.375% 0.435% If the price of the bond is inisilly discounted and offers no coupon payments, the bond is called a bond. Which feature of a bond contract allows the issuer to redeem a bond issue immediately in its entirety at an amount greater than par value prior to maturity? Call provision Put provision Sinking fund provision Convertible provision When are issuers more likely to call an outstanding bond issue? When interest rates are lower than they were when the bonds were issued When interest rates are higher than they were when the bonds were issued