These bonds are collateralized securities with first claims in the event of bankruptcy. What type of bond is this?
These bonds are not backed by any physical collateral. They are backed by the reputation and creditworthiness of the issuing company. What type of bond is this?
These bonds are considered the riskiest of all corporate bonds and thus offer the highest interest rates. What type of bond is this?

Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true?

A) An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking funds provision, the bond will have less default risk.

B) An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking funds provision, the bond will have more default risk.

In December 2008, Hawaiian Telcom took action to strengthen its balance sheet by reducing debt. Although the company continued to operate, its creditors could not collect their debts or loan payments that were due prior to the legal action that the company took. However, on November 30, 2009, the company had $75 million in cash on hand.

This is an example of:

A) Liquidation

B) Reorganization