7. The primary purpose of protective covenants is to help: A. protect bondholder

Question

7. The primary purpose of protective covenants is to help: A. protect bondholders from issuer actions B. the issuer in case of default C. reduce interest rate risk D. bondholders whose bonds are called E. convert bearer bonds into registered form 8. The term structure of interest rates is affected by which of the following? A. Interest rate risk premium and the real rate of interest B. When a prisoner escapes the Pit of Misery, but returns with Bud Light C. Interest rate risk premium, default risk premium, and the inflation premium D. Interest rate risk premium, the real rate of interest, and the inflation premium E. Interest rate risk premium, the real rate of interest, default risk premium and the inflation pre 9. The term structure of interest rates represents the relationship between which of the following? A. B. C. D. E. Nominal rates on risk-free and risky bonds Real rates on risk-free and risky bonds Nominal and real rates on default-free, pure discount bonds Market and coupon rates on default-free, pure discount bonds Nominal rates on default-free, pure discount bonds and time to maturity 10. What is the market called that allows shareholders to resell their shares to other investors? A. Primary B. Proxy C. Inside D. Secondary E. Initial Mary owns 100 shares of stock. Each share entitles her to one vote per open seat on the board of directors. Assume there are three open seats in the current election and Mary casts all 300 of her vo for a single candidate. What is the term used to describe this type of voting? 11. A. Proxy B. Cumulative C. Aggregate D. Straight E. Dilly Dilly

Explanation / Answer

Question Answer Explanation 7 a It protects bond holders from action taken by issuer 8 d All except default risk premium 9 e It represents the relationship shown in option e) 10 d In secondary market, stock can be sold to other investors. 11 d It is known as straight voting when you have votes equal to no. of shares held by you.

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