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Fill in items 1 through 14 with the best answer provided in items A through N below. Use each letter only once. ____ 1. Bond

Fill in items 1 through 14 with the best answer provided in items A through N below. Use each letter only once.

____ 1. Bond indenture ____ 8. Premium on bonds

____ 2. Coupon bonds ____ 9. Callable bonds

____ 3. Discount on bonds ____ 10. Serial bonds

____ 4. Market interest rate ____ 11. Debenture bonds

_____ 5. Face value ____ 12. Issue price

____ 6. Convertible bonds ____ 13. Zero-coupon bonds

____ 7. Mortgage bonds ____ 14. Face interest rate

A.

The bond contract that sets forth the specific elements of the agreement, including the loan amount, referred to as the face value, or par value, of the bond; the interest rate; and the maturity date.

B.

The amount to be paid at maturity. Also called par value.

C.

Bonds that are not backed by specific collateral but are based on the general creditworthiness of the company.

D.

Bonds that are backed by specific collateral. These bonds may be referred to as secured bonds.

E.

Bonds that bear coupons for each interest payment. When an interest payment is due, the bondholder removes the applicable coupon and presents it to a bank for payment.

F.

Bonds that do not require periodic interest payments and instead promise to pay a fixed amount at the maturity date.

G.

Bonds that the investor can exchange for stock at a specified conversion rate.

H.

Bonds that can be retired by the issuer for a specified price before their maturity date.

I.

Bonds issued on the same date that have differing maturity dates.

J.

The rate of interest to be paid to bondholders each period, as specified in the bond indenture. Also called coupon rate or stated rate.

K.

The rate of interest used for present value calculations in valuing the bond.

L.

The present value of the cash flows for the bond.

M.

The excess of face value over issue price.

N.

The excess of issue price over face value.

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