1. A firm will exercise its option to call a bond if interest rates rise.
a) True
b) False

2. A Euro-bond is denominated in the currency of a European nation.
a) True
b) False

3. Default means the failure to meet any of the terms of a bond's indenture.
a) True
b) False

4. Virtually all bonds have each of the following except
a) interest payments
b) maturity date
c) voting rights
d) an indenture

5. If a bond has a call feature, it usually also has a call penalty, which must be paid to the bondholder in partial compensation for the early retirement of the bond.
a) True
b) False