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Bonds: Types, Characteristics and Issuing Procedures

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

How is an unsecured bond different from a secured bond?

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1. Which of these bond types provides the bondholder with the right to exchange the bond for a specific number of shares in the company's common stock before the maturity date?

2.

X is a type of bond that is payable to whoever holds it. As such, anyone can claim ownership of X. Because of the risk associated with X, very few are in circulation today.

Identify X.

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About This Quiz & Worksheet

This quiz and corresponding worksheet will help you gauge your understanding of the different kinds of bonds in the accounting world and their primary characteristics. To pass the quiz, you'll need to be able to distinguish between the different bond types.

Quiz & Worksheet Goals

Use these assessment tools to assess your knowledge of the bond type that...

  • ...uses collateral to financially safeguard against default
  • ...uses only the credit rating of the issuer to secure it
  • ...is issued in the name and address of its holder(s)
  • ...provides the holder with the right to exchange it for shares in the company's common stock
  • ...allows the issuer to retire a bond before it reaches maturity
  • ...is payable to whoever bears or holds it
  • ...matures or becomes due on a specified date

Skills Practiced

This worksheet and quiz will let you practice the following skills:

  • Defining key concepts - ensure that you can accurately define main phrases, such as bondholder and issuer
  • Reading comprehension - ensure that you draw the most important information from the related lesson on the types and characteristics of bonds in accounting
  • Distinguishing differences - compare and contrast the many types of bonds

Additional Learning

To learn more about all the various types of bonds that exist and their characteristics, review the corresponding lesson on the Types and Characteristics of Bonds in Accounting. This lesson covers the following objectives:

  • Compare secured and unsecured bonds
  • Examine term and serial bonds
  • Understand the difference between registered and bearer bonds
  • Recognize convertible and callable bonds
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