Acc501 Short notes Lec 20

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THE BOND INDENTURE
 

Topic : Terms Of Bond

1.Corporate bonds usually have a face value of $1000, called

·         Face Value

·         Principle Value

·         Future Value

·         Present Value

2. Principal value Of bond is stated on the

·         bond certificate

·         Provisions

·         Bearer form

·         None of these

3. The par value (initial accounting value) of a bond is almost always same as the

·         Face Value

·         Principle Value

·         Future Value

·         Present Value

4, The corporate bonds are usually in registered form.  

·         Bearer Form

·         Registered form

·         Provisions

·         Debt Securities

5. The company keeps a ______ recording the ownership of each bond and any changes thereof.

·         Bearer Form

·         Provisions

·         Register

·         All Of These

  6. Bearer bonds are difficult to recover if ________

·         Lost

·         Stolen

·         Lost Or Stolen

·         None Of These

 Topic : Security of Bonds

1.      Debt securities are classified as collateral and mortgages used to protect the

·         Bondholders

·         Customers

·         Bankers

·         All of these

2.      Collateral means _________

·         Debt

·         Securities (bonds, stocks)

·         Repayment

·         None of these

3.      Mortgage securities are secured by a mortgage on the _________of the borrower, involving usually real estate.

·         Gold

·         Real property

·         A & b

·         None of these

4.       Debenture is an _________bond for which no specific pledge of property is made

·         Secured

·         Unsecured

·         Debt

·         All of these

5.      The term note is used for such instruments if the maturity of the bonds is less than ________when issued                                                

·        
2 years

·         5 years

·         10 years

·         15 years

Topic : Seniority

In case of default, the holders of subordinated Debt must offer inclination to other indicated lenders. Be that as it may, Debt can't be subordinated to value

Topic : Repayment , Call Provision

                                                      Bonds can be reimbursed at Maturity or they might be reimbursed                                    to a limited extent or in whole before maturity. Prior reimbursement is taken care of through a sinking store.

1, A sinking fund is an account managed by the ______ for the purpose of repayment of bonds.

·         Banker

·         Seller

·         bond trustee

·         None of these

                                                                                           Learning Points

 

2. A call provision allows the company to ______

·         Resale

·         Repurchase

·         Debt

·         All of these

3. Generally, the call price is________

·         Debt Value

·         Selling Value

·         Par value

·         Future value

4. The difference between the call price and the stated value is the_________

·         Bond Value

·         Profit

·         Par Value

·         Premium

5.Call provisions are not usually operative during the first part of a bond’s life, making it less of a worry for bondholders. It is called

·         Deferred call provisions.

·         Preferred call provision

·         Debt Provision

·         Call Protective

Protective Covenants

Negative covenants                                                                                            Positive covenants

 

Bond rating topic read from handouts ….. thankyou

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