标题: Reading 60: Features of Debt Securities LOSa习题精选 [打印本页]
作者: honeycfa 时间: 2010-4-23 11:17 标题: [2010]Session 15-Reading 60: Features of Debt Securities LOSa习题精选
Session 15: Fixed Income: Basic Concepts
Reading 60: Features of Debt Securities
LOS a: Explain the purposes of a bond's indenture and describe affirmative and negative covenants.
Which of the following is an example of a positive covenant? The company:
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A) |
must not use the same collateral to back more than one debt obligation. | |
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B) |
must maintain a times interest earned ratio of at least two times. | |
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C) |
may not sell fixed assets that have been pledged as collateral for the bonds. | |
Positive covenants specify what the company must do, negative covenants specify what they must not do. Both of the alternatives are examples of negative covenants.
作者: honeycfa 时间: 2010-4-23 11:17
Which of the following is NOT a negative bond covenant?
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A) |
Current ratio of at least 2.25. | |
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B) |
Credit rating must be investment grade. | |
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C) |
Restriction on asset sales. | |
Current ratio covenants are positive (borrower promises to perform) versus the others listed (prohibitions on the borrower).
作者: honeycfa 时间: 2010-4-23 11:17
Which of the following contains the overall rights of the bondholders?
Covenants are part of the indenture. A rights offering describes an equity offering—not fixed income.
作者: honeycfa 时间: 2010-4-23 11:18
Which of the following bond covenants is considered negative?
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B) |
Maintenance of collateral. | |
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Negative covenants set forth limitations and restrictions, whereas positive (affirmative) covenants set forth activities that the borrower promises to do.
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