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Match Each of the Appropriate Definitions with Correct Term

Question 231

Matching

Match each of the appropriate definitions with correct term.

Premises:
The contract between the bond issuer and the bondholders; it identifies the rights and obligations of the parties.
The interest rate that borrowers are willing to pay and lenders are willing to accept for a particular bond at its risk level.
Bonds that are payable to whoever holds them; also called unregistered bonds.
An accounting method that allocates interest expense over the bonds' life in a way that yields a constant rate of interest.
Bonds with interest coupons attached to their certificates; the bondholders detach the coupons when they mature and present them to a bank or broker for collection.
A liability requiring a series of periodic payments to the lender.
Bonds that are backed by the issuer's general credit standing.
Bonds that mature at more than one date and are usually paid over a number of periods.
Bonds that can be exchanged by the bondholders for a fixed number of shares of the issuing corporation's common stock.
Bonds that are scheduled for maturity on one specified date.
Responses:
Convertible bonds
Serial bonds
Bearer bonds
Term bonds
Coupon bonds
Unsecured bonds
Bond indenture
Effective interest rate method
Market rate
Installment note

Correct Answer:

The contract between the bond issuer and the bondholders; it identifies the rights and obligations of the parties.
The interest rate that borrowers are willing to pay and lenders are willing to accept for a particular bond at its risk level.
Bonds that are payable to whoever holds them; also called unregistered bonds.
An accounting method that allocates interest expense over the bonds' life in a way that yields a constant rate of interest.
Bonds with interest coupons attached to their certificates; the bondholders detach the coupons when they mature and present them to a bank or broker for collection.
A liability requiring a series of periodic payments to the lender.
Bonds that are backed by the issuer's general credit standing.
Bonds that mature at more than one date and are usually paid over a number of periods.
Bonds that can be exchanged by the bondholders for a fixed number of shares of the issuing corporation's common stock.
Bonds that are scheduled for maturity on one specified date.
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