Question : Debentures (Bonds) with zero coupon rates are those-
Option 1: Which carry the lowest interest rates.
Option 2: Which do not carry any rate of interest.
Option 3: Which carry the highest rate of interest.
Option 4: None of the above
Correct Answer: Which do not carry any rate of interest.
Solution : Zero Coupon Debentures (Bonds) are those debentures that do not carry any rate of interest. These debentures are issued at a discount and redeemed at Par.
Hence the Correct answer is option 2.
Question : Which of the following statements is not true?
Option 1: Coupon rate is a specified interest rate payable on debenture.
Option 2: Zero Coupon Bonds are issued with a specified interest rate.
Option 3: Deep Discount Bonds are issued at a price substantially below the maturity value.
Option 4: In India, debentures issued by Companies have necessarily to be secured.
Question : Which one of the following statements is true regarding the rate of interest?
Option 1: The rate of interest may be zero.
Option 2: The rate of interest increases with economic growth.
Option 3: The rate of interest can not be determined.
Option 4: The rate of interest can not be zero.
Question : If a company issued 1,000, 12% debentures of 100 each at a premium of 10%. Here, in 12% debentures, 12% represents:
Option 1: Rate of dividend
Option 2: Rate of tax
Option 3: Rate of interest
Question : Case Study 7:
GHI Corporation, a well-established company, is exploring options to reduce its cost of borrowing.
Question :
GHI Corporation wants to issue bonds with an adjustable interest rate. What type of bonds are these?
Option 1: Floating-rate bonds
Option 2: Corporate bonds
Option 3: Zero-coupon bonds
Option 4: Convertible bonds
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