1. Which of the following is not a type of bond?
a. Maturity
b. Zero coupon
c. Serial
d. Term
2. Kitten Inc. issued $105,000 in bonds on September 1. The annual interest rate is 6 percent and interest is paid on the bonds every June 30 and December 31. When the bonds are issued on September 1, how much cash will the company collect?
a. $105,000
b. $1,050
c. $106,050
d. $103,950
3. Which of the following is an agreement which debtors sign as part of getting a loan that serves to protect a creditor?
a. Security
b. Term bond
c. Leverage
d. Covenant
4. Which of the following is not a reason companies borrow money?
a. To raise needed funds
b. Interest is tax deductible
c. Creditors have no control over the company
d. Creditors do not become owners in the company