Question

Match each type of bond with its description. a. Secured Secured drop zone empty. b. Callable bonds Callable bonds drop zone empty. c. Convertible bonds Convertible bonds drop zone empty. d. Term Term drop zone empty. e. Serial bonds

Answer 1

Answer:

a. Secured bonds - A secured bond is a bond that is issued with a collateral backing the loan.

b. Callable bonds - A bond that the issuer can call off, or pay off, at any time, not necessarily at maturity.

c. Convertible bonds - A bond that can be converted into equity (stocks). If the bondholder wishes, he can exchange his bond for ownership of stocks in the bond issuer firm.

d. Term bonds - A bond that has one single, specific maturity date.

e. Serial bonds - A bond that has several maturity dates.