To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential.

2. Characteristics of bonds To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential For example: A bond's entity borrows and promises to repay on the maturity date. refers to its face value and the amount of money that the issuing if it does not pay the interest or the principal in A bond issuer is said to be in accordance with the terms of the indenture agreement 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 or preferred share, respectively, into a specified number or value of common shares allows a bondholder or preferred stockholder to convert their bond Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information: Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00 What is the coupon interest rate of this bond? 0.435% 4.375% If the coupon interest rate is 4.375% for the first six months and changes to a rate equal to the 10-year Treasury bond rate plus 1.3% thereafter, the bond is called a bond. Which feature of a bond contract allows the issuer to redeem a bond issue immediately in its entirety at an amount greater than par value prior to maturity? Deferred call provision Call provision Convertible provision Put provision Which term is used to describe a call provision in which the issuer is prevented from calling a portion or the entire issue for several years during the early years of the bond issue? Delayed call provision Declining call provision Deferred call provision