To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential For example . A bond's refers to its face value and the amount of money that the issuing entity borrows and promises to repay on the maturity date. . A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreem ent or if it violates one or more of the issue's restrictive covenants. . The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called .A bond's gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions. Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following Bridge Bonds Series A Dated 7.15-2005 4.375% Due 7-15-2055 @ 100.00 What is the maturity date of this bond? o 7-15-2005 o 7-15-2055 If the coupon interest rate remains constant from the time of issue until the bond matures, then the bond is called a bond The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called the Issuers can gradually reduce the outstanding balance of a bond issue by using a sinking fund account into which they deposit a specified amount of money each year. To operationalize the sinking fund provision of an indenture, issuers can (1) purchase a portion of the debt in the open market or (2) call the bonds if they contain a call provision. Under what circumstances would a firm be more likely to buy the required number of bonds in the open market as opposed to using one of the other procedures? O When interest rates are lower than they were when the bonds were issued O When interest rates are higher than they were when the bonds were issued