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A call provision can make a bond more risky for the investor because it gives the issuer the option to redeem the bond at a predetermined price before maturity, potentially preventing the investor from earning interest for the full term. On the other hand, a sinking fund provision can make a bond less risky for investors as it requires the issuer to set aside money regularly to retire a portion of the bond issue before maturity, reducing the overall outstanding debt and default risk.
What else can I help you with?
An interaction that hold two atoms togather is call?
It is called bond or chemical bond.
What do you call the energy which is required to bond atoms together?
Covalent [the sharing of a pair of electrons] bond energy.
What do you call the electrons shared between two atoms in a molecule?
Covalent bond
What do you call when atoms form bonds and share electron s?
a convalesnt bond
What is the difference between a callable bond and a retractable bond?
A callable bond is where the issuer has the ability to redeem the bond prior to maturity. A callable bond is where the bond hold has the ability to force the issuer to redeem the bond before maturity. Hope this helps.
What is a provision on a bond which provides for the systematic retirement of the bond prior to their maturity?
A provision on a bond that provides for the systematic retirement of the bond prior to maturity is known as a sinking fund provision. This provision requires the issuer to set aside funds on a regular basis to repay a portion of the bond issue before it matures, reducing the overall debt burden.
Does these provisios make bonds more or less risky?
Provisions in bonds can make them either more or less risky, depending on the specific details. For example, call provisions can make a bond more risky for investors as they allow the issuer to redeem the bond early. Conversely, provisions like sinking funds can make a bond less risky by requiring the issuer to set aside money to repay the bond at maturity.
What provision allows the issuer to redeem the bond before its maturity at a specified price?
Call Provision
Type of bond that is exceptionally risky?
junk bond
What does insurance provision mean?
Insurance provision means the conditionality to be adhered to by both the insured and the insurer,as embedded in an insurance policy bond.
Why is a call provision advantegeous to bond issuer?
A call provision is advantageous to a bond issuer because it allows them to redeem the bonds before maturity, typically when interest rates decline. This enables the issuer to refinance the debt at a lower interest rate, reducing their overall borrowing costs. Additionally, having the flexibility to call bonds can help the issuer manage their debt more effectively in response to changing financial conditions. Overall, it provides financial flexibility and potential cost savings for the issuer.
Will a call provision increase or decrease the yield to maturity at which a firm can issue a bond?
Callable bonds will pay a higher yield than comparable non-callable bonds. Take from answers.com
What does make whole call at 40 mean?
A "make whole call at 40" typically refers to a provision in a bond or loan agreement allowing the issuer or borrower to redeem the security at a specific price, in this case, 40 (usually expressed as a percentage of face value), before its maturity date. This provision is designed to compensate investors for the potential loss of interest income when the bond is called early. The term "make whole" implies that the issuer will pay an additional amount to ensure that investors receive an equivalent return they would have earned if the bond had not been called.
Where does bond sinking fund go on balance sheet?
A bond sinking fund is reported in the section of the balance sheet immediately after the current assets. The bond sinking fund is part of the long-term asset section that usually has the heading "Investments." The bond sinking fund is a long-term (noncurrent) asset even if the fund contains only cash. The reason is the cash in the fund must be used to retire bonds, which are long-term liabilities. In other words, because the money in the bond sinking fund cannot be used to pay current liabilities, it must be reported outside of the working capital section of the balance sheet. (Working capital is current assets minus current liabilities.)
In Louisiana how long do they have to arraign you after you post bond on mis.or felony charges?
"Speedy Trial" statutes usually call for a 90 day period, unless that provision has been waived by agreement between the defense and the prosecutor.
What do you call a chemical bond when atoms share electons?
A covalent bond.
In a Sinking Fund cash or cash assets are set aside for what purpose?
A bond sinking fund is a restricted asset of a corporation that was required to set aside money for redeeming or buying back some of its bonds payable.
