Question

•	A bond’s _____ refers to the interest payment or payments paid by a bond.
•	A bond issuer is said to be in _____ If it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants.
•	A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a _______
•	A bond’s ______ gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions.

Answer 1

•	A bond’s COUPON refers to the interest payment or payments paid by a bond.
•	A bond issuer is said to be in DEFAULT If it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants.
•	A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a SINKING FUND PROVISION
•	A bond’s CALL OPTION gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions.