What is the purpose of the call provision on some bonds?
What will be an ideal response?
Answer: Many times the issuing company needs to raise outside financial capital when the market rates of interest are high, forcing the company to offer a high coupon rate to make the bonds attractive. The high coupon rates mean than the company must pay out a large amount of money to the bondholders. The call provision allows the company to refinance their debt at a lower coupon rate meaning they will save money on the coupon payments. When the market rates of interest fall, they can sell new bonds with a lower coupon rate and use the proceeds from the new bond issue to call the older, more expensive bonds.
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What criteria do marketers need to consider when selecting specific media vehicles?
What will be an ideal response?
Which of the following statements is incorrect?
A. An annuity is a series of payments pursuant to a contract. B. Contributions to a pension plan can only be made by the beneficiary. C. A payment to a beneficiary from a pension plan is called a distribution. D. With a qualified pension plan, earnings on plan assets are not taxed in the year earned.
Which of the following is not an exception to the act of state doctrine?
A) A sovereign waives its right to raise the act of state defense. B) A foreign sovereign contracts to sell a service. C) A foreign sovereign's decides to grant a license to export a natural resource. D) There is a claim to property based on the assertion that a foreign state confiscated the property in violation of the principles of international law.
Your home insurance provides for replacement value for personal property losses. Your china hutch was vandalized and completely destroyed. Your hutch cost $400 four years ago, but a new one will cost you $600
How much will the insurance company pay? A) $400 B) $200 C) $600 D) Nothing, vandalism is not covered.