1. Explain the difference between calling a bond and a bond refunding.
2. Identify the three most important determinants of the price of a bond. Describe the effect of each.
3. Given a change in the level of interest rates, discuss how two major factors will influence the relative change in price for individual bonds.
4. Briefly describe two indenture provisions that can affect the maturity of a bond.
5. Explain the differences in taxation of income from municipal bonds, from U.S. Treasury bonds, and from corporate bonds.
6. For several institutional participants in the bond market, explain what type of bond each is likely to purchase and why.
7. Why should investors be aware of the trading volume for bonds in their portfolio?
8. What is the purpose of bond ratings?
9. Based on the data in Exhibit 17.2, discuss the makeup of the Japanese bond market and how and why it differs from the U.S. market.
10. Discuss the positives and negatives of investing in a government agency issue rather than a straight Treasure bond.