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9. More on types of bonds You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on,

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9. More on types of bonds You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on, Identify the type of bond based on each description given in the table that follows: Based on vour understanding of bond ratings and bond-rating criteria, which of the following statements is true? During an economic recession and in a pessimistic environment, the vield spread between us government bonds and corporate bonds could be higher than during good economic times. During a period of economic growth and in an optimistic enwironment, the vield spread between us oovernment bonds and corporate bonds could be higher than during an economic recession and a pessimicic environment. In 2008 , the United States began to witness one of the worst recesslons since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, espedally bankino and finandial entities. Severe Bquidity shortalls in the United States as well as other global markets led to a serlous credit clils. During the credit cilsis of 200f2009, severat banks and other businesses went through a reorganization process or were forced to liquidate. Coesider the following example: In 2008 , the United States began to witness one of the worst recessions since the 19305 . The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of 2008-2009, several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following example: In December 2008, Hawailan Telcom took action to strengthen its balance sheet by reducing debt. Although the company continued to operate, its creditors could not collect their debts or loan payments that were due prior to the legal action that the company took. However, on November 30,2009 , the company had $75 million in cash on hand. This is an example of: Liquidation Reorganization

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