A bond's principal value is also referred to as the maturity value because it is

a$.$ always repaid at a discount prior to the bond's maturity

b$.$ written on the face of the debt contract

c$.$ repaid at the maturity date

d$.$ added to interest payments that are repaid at the maturity date

e$.$ issued at a value below par value to generate a positive capital gain

The date on which the principal amount of a debt is due is the

a$.$ maturity date

b$.$ reinvestment date

c$.$ issue date

d$.$ repurchase date

e$.$ priority date

A bond differs from a term loan in that a bond

a$.$ is always negotiated between a financial institution and an investor

b$.$ is sold to a financial institution only

c$.$ is always offered to the public at a variable coupon rate

d$.$ has a higher issuance cost

e$.$ involves minimal formal documentation

The face value of a debt is

a$.$ the principal value written on the face, or outside cover, of a debt contract

b$.$ always equal to the market value of the debt

c$.$ equal to the principal value minus the interest payments to investors

d$.$ always greater than the maturity value of the debt

e$.$ added to the interest payments to find the maturity value of the debt

Which of the following is true of a traditional certificate of deposit $($CD$)?$

a$.$ Traditional CDs must be kept at the issuing institution for a specified time period.

b$.$ Traditional CDs pay no periodic interest.

c$.$ Traditional CDs are repaid in installments by the issuing bank.

d$.$ Traditional CDs have a floating rate of interest.

e$.$ Traditional CDs are discounted when their market price is more than issue price.

Chapter $7-$ Stocks $($Equity$)$

Indicate the answer choice that best completes the statement or answers the question.

Which of the following is true of common stock?

a$.$ Common stock is often referred to as a hybrid security.

b$.$ Common stock often contains some of the same characteristics as bonds.

c$.$ Most common stock traditionally pays a constant income called interest.

d$.$ A firm can be forced into bankruptcy if it misses common stock dividend payments.

e$.$ Dividends must be paid on preferred stock before they can be paid on common stock.

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