CFIN Chapter 6
.bankers acceptance - ANSWER-short term debt, instrument issued by a bank that obligates the bank to pay a specified amount at some future date
.bond contract features - ANSWER-1. bond indenture 2. call provision 3. sinking fund 4. convertible feature
.call provision - ANSWE...
CFIN Chapter 6
.bankers acceptance - ANSWER-short term debt, instrument issued by a bank that obligates the bank to
pay a specified amount at some future date
.bond contract features - ANSWER-1. bond indenture 2. call provision 3. sinking fund 4. convertible
feature
.call provision - ANSWER-provision in a bond contract that gives the issuer the right to redeem the bonds
under specified terms prior to the normal maturity date
.capital gains yield - ANSWER-the percentage change in the market price of a bond over some period of
time
.CD - ANSWER-short term debt, certificate of deposit, interest earning time deposit at a bank or other
financial intermediary
.characteristics of debt - ANSWER-1. principal value 2. interest payments 3. maturity date 4. priority to
assets and earnings 4. control of the firm (votings rights)
.commercial paper - ANSWER-short term debt, a discounted instrument that is a type of promissory
note or legal IOU issued by large, financially sound firms
.converstion feature - ANSWER-permits bondholders to exchange their investments for a fixed number
of shares of common stock
.corporate bonds - ANSWER-long term debt, bonds issued by corporations
.coupon rate - ANSWER-long term debt, interest paid on a bond or other debt instrument stated as a
percentage of its face (maturity) value
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