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COB 300 Finance Exam #3 Definitions Questions and Answers 100% Pass $12.49
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COB 300 Finance Exam #3 Definitions Questions and Answers 100% Pass

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COB 300 Finance Exam #3 Definitions Questions and Answers 100% Pass Bond - A financial security that represents a promise to repay a fixed amount of funds - term longer than 7 years Treasury Bonds - bonds issued by the federal government, sometimes referred to as government bonds Corporate B...

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  • January 8, 2025
  • 9
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • COB 300
  • COB 300
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COB 300 Finance Exam #3
Definitions Questions and Answers
100% Pass

Bond - ✔✔A financial security that represents a promise to repay a fixed amount of funds


- term longer than 7 years


Treasury Bonds - ✔✔bonds issued by the federal government, sometimes referred to as government

bonds


Corporate Bonds - ✔✔- bonds issued by corporations


- exposed to default risk


Municipal Bonds - ✔✔- bonds issued by state and local governments


- exposed to default risk


- ADVANTAGE: interest earned is exempt from federal taxes and from state taxes if the holder is a

resident of the issuing state


- market interest rate is considerably lower than on a corporate bond of equivalent risk


Foreign Bonds - ✔✔Bonds issued by foreign governments or by foreign corporations




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Par Value - ✔✔stated face value of the bond


- represents the amount of money the firm borrows and promises to repay on the maturity date


Coupon Payment - ✔✔specified number of dollars of interest paid each year


Coupon Interest Rate - ✔✔the stated annual interest rate on a bond


- annual coupon rate / par value


Debt - ✔✔a promise by the borrower to repay the amount borrowed, plus interest


Bill (Paper) - ✔✔a short-term debt obligation with an initial maturity less than one year


- EX: T-note or Note of Paper


Note - ✔✔an obligation with a maturity between 1 and 7 hears


Issuer - ✔✔Borrower


Bondholder - ✔✔Lender


Traditional Bond - ✔✔has both an interest coupon and a face value, annual or semi-annual coupon

payments


Zero-Coupon Bond - ✔✔- no coupon payments


- pays face value at maturity


- sell at deep discount


Amortized Loan - ✔✔A loan in which the principal as well as the interest is payable in monthly or other

periodic installments over the term of the loan.




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