Question

Consider the preceding question. Explain what is meant by “unsecured” debt. (Be specific.)

8.          A mortgage is a secured debt instrument. By what is a mortgage “secured”? (Hint: the answer is not “a house.”)

9.          Give two alternative names for the par value of a bond issue. (Do not abbreviate.)

            a.                                                                                  b.

10.        Give two alternative names for the coupon rate associated with a bond issue. (Do not abbreviate.)

            a.                                                                                  b.

11.        Give two alternative names for the yield associated with a bond issue. (Do not abbreviate.)

            a.                                                                                  b.

12.        Bonds that are issued at a price above their face value are issued at a _____________________, whereas bonds issued at a price below their face value are issued at a ___________________. (Do not abbreviate.)

13.       Consider bonds issued at a discount or premium. Should an unamortized discount be added to or subtracted from the face value of the bond? What about in the case of an unamortized premium? (In each case, your answer should be either “added” or “subtracted.”)

           Unamortized discount:                                                        Unamortized premium:

14.      Distinguish between term bonds and serial bonds. (Be specific.)

           Term bonds:

           Serial bonds:

15.        What are callable bonds? (Be specific. “Bonds that are callable” does not answer the question.)

Answer 1

Unsecured debt is a debt which is not secured on any collateral secured property & if the borrower default the lender may can't recover .

8.) mortgage can be secured by any collateral property ,mortgage provide lien on property.

9) Nominal value or face value

10) Nominal yield or yield rate

11) Interest or dividend or return

12)Bonds that are issued at a price above their face value are issued at a ____Premium_________________, whereas bonds issued at a price below their face value are issued at a __________Discount_________.

13)unamortized discount :subtracted

14)unamortized premium :added