Provide an answer to each of the questions below . For the questions that require calculations , you may* LIFE EXCEL or a financial calculator - though I do Encourage you to use a financial calculator as this is what you will need to use when you write the final exam . Please show your work ( what formulae you USE , what calculations you make and your final summary statement answering the question posed ! . The assignment is made Up of two parts , you will receive $` for each part ( A and E ), 2{` for overall quality , and 2%6 for Structure ; this totals 20%6 for the complete value of the assignment . Part A : Bond Features , Markets and Pricing 135 possible marks contributing to 346 of the total assignment weight ! 1 . What are loan covenants ?" How do these compare to guarantees , pledges and warrants ? (5 marks ) 2 . What are bond rating agencies ?" Provide an example . What type of risk are bond agencies most concerned with when they rate a company's bonds ?" Why ? Finally , provide an example of an Entity* whose bonds are rated . (5 marks ) 3 . Tommy told Betty what he learned in finance class today . " Did you know , Betty , that the feature of a bond where the issuer can redeem the band from the holder in exchange for the face amount plus . in most cases , a premium is called a " sinking fund ' provision " . Betty said , " what are you talking about ! That is called a repo provision ! " What do you think ? Who is right - Tommy or Getty ? Or are they both right ?" Or , are both of them wrong ?" If both of them are wrong , what is it that Tommy and Betty are describing ? (3 marks ) 4 . Tim own shares of Good DOE Inc . Tim's friend Jennifer told Tim , "I heard that Good DOE Inc . is going* to issue convertible bonds - at a price that doesn't seem much different from non- convertible bonds ." When Tim heard this , he was mad . Jennifer , on the other hand , is a conservative investor who is very old and depends on a steady income . She was happy . Describe why Tim might be unhappy and Jennifer might be happy . (3 marks )