To be effective issuing and investing in bonds, knowledge of their terminology,

Question

To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: A bond's refers to its face value and the amount of money that the issuing entity borrows and promises to repay on the maturity date. A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants. A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a A bond's gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions.

Explanation / Answer

1) Principal or Par value

2) Default

3) Sinking fund provision

4) Call provisions

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