B-1 B-2 Explain the difference between a convertible and callable bond. What happens to the principal and interest portions of a payment throughout the amortization period? Why is the final payment different? Explain why a company would choose to lease rather than buy an asset. B-3 B-4 List and describe two reasons why a company would create a sinking fund. B-5 How are bond prices affected by market rates? Explain why B-6 Describe the capital budgeting process. B-7 List and describe the three components that influence interest rates