1. After bonds have been issued, their market value can be expected to:
   1. Rise as any premium is amortized
   2. Fall if interest rates rise
   3. Fall as any discount is amortized
   4. Rise if interest rates rise
2. The amortization of a bond discount:
   1. Decreases the carrying value of a bond and increases interest expense
   2. Decreases the carrying value of a bond and decreases interest expense
   3. Increases the carrying value of a bond and increases interest expense
   4. Increase the carrying value of a bond and decreases interest expense
3. The interest coverage ratio:
   1. Is computed by dividing total liabilities by annual interest expense
   2. Is computed by dividing liquid assets by annual required interest payment
   3. Indicates the percentage of total assets that are financed with borrowed money
   4. Measures the number of times the annual interest expense could be covered by the annual income from operations
4. Which of the following ratios and rates that measure debt-paying ability focuses on the long-term position of a company?
   1. Quick ratio
   2. Inventory turnover
   3. Current ratio
   4. Debt ratio