chapter 15
False
Bond interest payments are not a tax deductible business expense.
True
Generally interest on corporate bonds is paid every six months.
False
The only way in investor can make money on a bond investment is to hold the bond until maturity.
True
A bond backed by the full faith credit and unlimited taxing power of the municipality that issued it Is called a general obligation bond.
True
A bond that is backed only by the reputation of the issuing corporation is called a Debenture bond.
True
A convertible bond is a bond that can be exchanged at the owners option for a specified number of shares of the corporation common stock.
True
A corporate bond is a corporations written pledge that it will repay a specified amount of money with interest.
True
A mortgage bond is a corporate bond that is secured by various assets of the issuing firm.
True
A registered bond is a bond whose ownership is registered in the owners name by the issuing company.
True
A sinking fund is a fund to which deposits are made each year for the purpose of redeeming a bond issue.
False
A subordinated debenture is a more Secure investment than a mortgage bond.
True
Hey revenue bond is a bond that is repaid from the income generated by the project it is designed to finance.
False
If overall interest rates in the economy fall than a corporate bond with a fixed interest rate will decrease in value.
False
Mortgage bonds are somewhat risky so they pay a higher return to investors.
True
The legal conditions for a corporate bond are described in the bond indenture.
