Corporate Bonds Quiz

Which section of the Companies Act equates corporate bonds with debentures in India?

• Section 2(10)

• Section 2(12)

• Section 2(22)

• Section 2(25)

Which type of bond allows the issuer to buy it back before maturity?

• Puttable bond

• Callable bond

• Convertible bond

• Floating rate bond

A floating rate bond is considered riskier than a fixed rate bond because:

• It has a lower coupon rate.

• Interest payments are linked to a benchmark rate.

• It lacks a maturity date.

• It is always unsecured.

In the event of a company's liquidation, which of the following ranks the highest in repayment priority?

• Equity shares

• Subordinated secured bonds

• Senior secured bonds

• Preference shares

Which risk is most relevant to a callable bondholder?

• Reinvestment risk

• Credit risk

• Liquidity risk

• Interest rate risk

The price sensitivity of a bond to interest rate changes is measured by:

• Current yield

• Duration

• Yield to maturity

• Coupon rate

If a company issues bonds with a floating rate linked to MIBOR + 3%, and MIBOR is currently 7%, what is the coupon rate?

• 3%

• 7%

• 10%

• 4%

Which ratio is used to measure a company's ability to meet interest payments?

• Debt-to-equity ratio

• Return on equity

• Interest coverage ratio

• Current ratio

Bonds issued at a price below face value are called:

• Premium bonds

• Discount bonds

• Callable bonds

• Convertible bonds

Which type of bond is most likely to offer the lowest interest rate?

• Convertible bond

• Unsecured bond

• Subordinated bond

• Fixed-rate bond