Question
Select the correct statement. A. The call provision allows the company the option to buy back the bond from the investor before it matures. B.
Select the correct statement.
A. The call provision allows the company the option to buy back the bond from the investor before it matures.
B. Protective covenants protect the rights of the company in a bond offering.
C. The rights of the bondholder are stated in the proxy statement.
D. A sinking fund is used by firms to fund emergency expenses.
If a bond has a coupon rate of 5% and the market rate of interest (the yield to maturity) is 3%, the bond will sell ______ and the price of the bond will ____ as the bond approaches maturity.
A. at a premium; decrease
B. at a premium; not change
C. at a discount; decrease
D. at a discount; decrease
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