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Unformatted text preview: ch20 Student: _______________________________________________________________________________________ Multiple Choice Questions 1. The length of time debt remains outstanding with some unpaid balance is called the: A. funded period. B. sinking fund period. C. deferred call period. D. maturity. E. None of the above. 2. Long-term debt is sometimes called: A. funded debt. B. hybrid debt. C. unfunded debt. D. preferred stock. E. None of the above. 3. Short-term debt is sometimes referred to as: A. secured debt. B. hybrid debt. C. unfunded debt. D. equity. E. None of the above. 4. Long term debt that is privately placed debt is directly placed with: A. an investment banker. B. another manufacturing corporation. C. a lending institution. D. the federal government. E. None of the above. 5. The written agreement between a corporation and the bondholder's representative is called: A. the call provision. B. the collateral maintenance agreement (CMA). C. the indenture. D. the prospectus. E. None of the above. 6. A public issue of bonds approved by the board of directors (and shareholders if necessary) can be sold when: A. the registration statement has been filed with the SEC and the syndicate is set. B. the investment banker's have accepted the offer for sale and have held it for 20 days from announcement. C. the registration statement has been filed with the SEC, accepted, and the 20 day waiting period has elapsed. D. the role of the trustee has been determined and an indenture ahs been written and signed. E. None of the above. 7. The trustee's job as agent for the bondholders is to: A. represent the bondholders if the company defaults, manage any sinking fund, and see that the indenture terms are obeyed. B. advise the company on debt disposition, manage any sinking fund, and minimize indenture covenants. C. represent the bondholders if the company defaults, call the bond issue and minimize indenture covenants. D. advise the company on debt disposition, call the bond issue and see that the terms of the indenture are obeyed. E. None of the above. 8. A description of the property in security and the details of the protective covenants are: A. key terms in a rights agreement. B. the basic terms of a bond. C. key parts of a typical bond indenture. D. key parts of a typical bond debenture. E. None of the above. 9. Which of the following bonds is secured by corporate assets? A. Mortgage bond B. Collateral trust bond C. Debenture D. Two of the above. E. All of the above. 10. The main difference between an open-end and closed-end mortgage trust indenture is that: A. the mutual fund carries a no load fee. B. an open-end trust indenture allows for unlimited bond issuance....
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This note was uploaded on 12/21/2011 for the course NIKA 101 taught by Professor Temur during the Spring '11 term at Acton School of Business.

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ch20 - ch20 Student:

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