A speculative-grade bond that had an investment-grade rating when it was originally issued is called a (i), while an original-issue speculative-grade bond is called a (ii). (i) (ii) a. revised-down bond junk bond b. berated bond fallen angel c. junk bond fallen angel d. fallen angel junk bond ANSWER D
Date: September 19th, 2020
Credit selection involves application of techniques for determining which customers should receive credit. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A firm’s credit standards are the minimum requirements for extending credit to a customer. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The gives the bond issuer an option to redeem a specified fraction of the bond issue within a specified period at a predetermined price, but only by using funds from a subsequent equity offering. a. subsequent events provision b. clawback provision c. contingency provision d. conversion provision ANSWER B
Date: September 19th, 2020
With a make whole call provision: a. the firm to pay a call price that is sufficient to provide bondholders an ex post return equal to the return they would have received on a noncallable Treasury bond with the same original maturity as the called bond. b. the firm must retire either the entire (or […]
Date: September 19th, 2020
TRUE or FALSE: In Chapter 11 proceedings, the court almost always strictly adheres to the Absolute Priority Rule (APR). a. TRUE b. FALSE ANSWER B
Date: September 19th, 2020
Futures trading features daily _(i)_ in cash and _(ii)_. _(i)_ _(ii)_ a. closing marking-to-market b. resettlement closing c. resettlement marking-to-market d. swapping marking-to-market. ANSWER C
Date: September 19th, 2020
In a, the claimants have already worked out the terms of the reorganization, and basically file just to make the agreement official. a. perfunctory filing b. token filing c. prepackaged bankruptcy d. gesture filing ANSWER C
Date: September 19th, 2020
Jia’s Apple Farm uses 12,600 baskets a year for apple shipment. Determine the optimum order quantity of baskets assuming the order costs per order is $600 and it costs $2 to carry a unit of basket in inventory per period. What will be an ideal response? ANSWER EOQ = = 2,750 units
Date: September 19th, 2020
In complete voluntary liquidations, the sum of the firm’s parts is worth more than the whole, for all of the following reasons EXCEPT: a. the assets (or divisions) may be worth more in the hands of more competent managers. b. liquidated assets always sell at a premium to their fair value. c. the special tax […]
Date: September 19th, 2020
