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'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 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 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 What is the maturity date of this bond? 7-15-2055 7-15-2005 bond If the price of the bond is initially discounted and offers no coupon payments, the bond is called a Which feature of a bond contract allows the issuer to redeem a bond issue immediately in its entirety at an amount greater than per value prior to maturity? 7-15-2005 If the price of the bond is initially 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 por value prior to maturity? Call provision Sinking fund provision Put provision Convertible provision When are issuers more likely to call an outstanding bond issue? When interest rates are higher than they were when the bonds were issued When Interest rates are lower than they were when the bonds were issued Grade It Now Save & Continue Continue without saving