9. More on types of bonds You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Description These bonds are backed by real estate holdings and equipment, and if a company goes bankrupt, the collateral can be sold off to compensate for the default. These bonds, more so than other collateralized securities, have prior claims over assets. These bonds are traded in the bond markets based on investors' belief that the issuer will not default on the repayment. These bonds have no collateral and usually offer higher yields. These bonds have a claim on assets only after senior debt has been paid in full. Type of Bond Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true? During an economic recession and in a pessimistic environment, the yield spread between US government bonds and corporate bonds could be higher than during good economic times. During a period of economic growth and in an optimistic environment, the yield spread between US government bonds and corporate bonds could be higher than during an economic recession and a pessimistic environment. In 2008, the United States began to witness one of the worst recessions since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of 2008-2009, several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following example: In December 2008, Hawaiian Telcom took action to strengthen its balance sheet by reducing debt. Although the company continued to operate, its creditors could not collect their debts or loan payments that were due prior to the legal action that the company took. You can distinguish the various types of bonds by their terms of controct, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true? During an economic recession and in a pessimistic environment, the vield spread between us government bonds and corporate bonds could be higher than during good economic times. During a period of economic growth and in an optimistic environment, the yleid spread between us government bonds and corporate bonds could be higher than during an economic recession and a pessimistic environment. In 2008, the United States began to witness one of the worst recesslons since the 1930 s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especial.

1. 9. More on types of bonds You can distinguish the various types of bonds by their terms of
contract, pledge of collateral, and so on. Identify the type of bond based on each description
given in the table that follows: Description These bonds are backed by real estate holdings and
equipment, and if a company goes bankrupt, the collateral can be sold off to compensate for the
default. These bonds, more so than other collateralized securities, have prior claims over assets.
These bonds are traded in the bond markets based on investors' belief that the issuer will not
default on the repayment. These bonds have no collateral and usually offer higher yields. These
bonds have a claim on assets only after senior debt has been paid in full. Type of Bond Based on
your understanding of bond ratings and bond-rating criteria, which of the following statements is
true? During an economic recession and in a pessimistic environment, the yield spread between
US government bonds and corporate bonds could be higher than during good economic times.
During a period of economic growth and in an optimistic environment, the yield spread between
US government bonds and corporate bonds could be higher than during an economic recession
and a pessimistic environment. In 2008, the United States began to witness one of the worst
recessions since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline
in real estate prices, affecting consumers and institutions, especially banking and financial
entities. Severe liquidity shortfalls in the United States as well as other global markets led to a
serious credit crisis. During the credit crisis of 2008-2009, several banks and other businesses
went through a reorganization process or were forced to liquidate. Consider the following
example: In December 2008, Hawaiian Telcom took action to strengthen its balance sheet by
reducing debt. Although the company continued to operate, its creditors could not collect their
debts or loan payments that were due prior to the legal action that the company took. You can
distinguish the various types of bonds by their terms of controct, pledge of collateral, and so on.
Identify the type of bond based on each description given in the table that follows: Based on your
understanding of bond ratings and bond-rating criteria, which of the following statements is true?
During an economic recession and in a pessimistic environment, the vield spread between us
government bonds and corporate bonds could be higher than during good economic times.
During a period of economic growth and in an optimistic environment, the yleid spread between
us government bonds and corporate bonds could be higher than during an economic recession
and a pessimistic environment. In 2008, the United States began to witness one of the worst
recesslons since the 1930 s. The collapse of the housing bubble in 2006 led to a massive decline
in real estate prices, affecting consumers and institutions, especially banking and financial
entities. Severe liquidity shortfalls in the United States as weil as other global markets led to a
serious credit crisis. During the credit crisis of 2008-2009, several banks and other businesses
went through a reorganization process or were forced to liquidate. Consider the foliowing

2. example: In December 2008, Howallan Telcom took action to strengthen its balance sheet by
reducing debt. Although the company continued to operate, its creditors could not collect their
debts or loan payments that were due prior to the legal action that the company took.
Based on your understanding of bond ratings and bond-rating criteria, which of the following
statements is true? During on economic recession and in a pessimistic environment, the yleid
spread between uS government bonds and corporate bonds could be higher than during good
economic times. During a period of economic growth and in an optimistic environment, the yield
spread between US government bonds and corporate bonds could be higher than during an
economic recession and a pessimistic environment: In 2008, the United States began to withess
one of the worst recesslons since the 1930 s. The collapse of the housing bubble in 2006 led to a
massive decline in real estate prices, affecting consumers and institutions, especially banking and
financial entities, Severe liquidity shortfalls in the United States as well as other global markets
led to a serious credit crisis. During the credit crisis of 20082009, several banks and other
businesses went through a reorganization process or were forced to liquidate. Consider the
following example: In December 2008, Hawalian Telcom took action to strengthen its balance
sheet by reducing debt. Although the company continued to operate, its creditors could not
collect their debts or loan payments that were due prior to the legal action that the company took.
However, on November 30, 2009, the company had $75 million in cash on hand. This is an
example of: Luquidation Reorganlzation