Question

Match each of the following terms with the appropriate definitions 1 through 10.

1 The contract between the bond issuer and the bondholder(s); it identifies the rights and obligations of the parties. Secured bonds
2. A series of equal payments at equal intervals. Annuity
3. Bonds that give the issuer an option of retiring them at a stated amount before the date of maturity. Premium on bonds
4. Bonds that require the issuer to create a fund of assets at specified amounts and dates to repay the bonds at maturity. Callable bonds
5. Bonds that have specific assets of the issuer pledged as collateral. Contract rate
6. The ratio of total liabilities to total equity. Bond indenture
7. The difference between the par value of a bond and its higher issue price or carrying value. Sinking fund bonds
8. The interest rate specified in the bond indenture. Carrying value
9. A written promise to pay an amount identified as the par value along with interest at a stated rate. Debt to equity ratio
10. The net amount at which bonds are reported on the balance sheet. Bond

Answer

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