PP-CH7 - (FIN 331 Practice Problems CHAPTER 7 1 When you...

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(FIN 331) Practice Problems CHAPTER 7 1. When you refer to a bond's coupon, you are referring to which one of the following? A. Difference between the purchase price and the face value B. Annual interest divided by the current bond price C. Difference between the bid and ask price D. Annual interest payment E. Principal amount of the bond 2. What is the principal amount of a bond that is repaid at the end of the loan term called? 3. The current yield on a bond is equal to the annual interest divided by which one of the following? 4. The written agreement that contains the specific details related to a bond issue is called the bond: 5. A note is a(n): A. unsecured debt that is generally payable within the next 10 years. B. formal type of loan that is secured by real estate. C. long-term debt secured by part, or all, of the assets of the borrower. D. debt that is secured by a borrower's accounts receivable. E. written agreement that details the information relative to a bond issue.
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(FIN 331) Practice Problems CHAPTER 7 6. A call provision grants the bond issuer the: 7. The call premium is the amount by which the: 8. Which one of the following terms applies to a bond that initially sells at a deep discount and pays no interest payments?
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