1.Which of the following statements about the early retirement of debt is least accurate?
　　A. Noncallable bonds generally cannot be retired for any reason prior to maturity.
　　B. Sinking fund provisions require the issuer to systematically retire the issue over its life rather than at maturity.
　　C. Non-refundable bonds prohibit a company from calling an issue financed by the proceeds of a lower cost refunding bond issue.
　　D. When bonds are redeemed under sinking fund provisions, the call price is known as the "regular redemption price."
　　2.AportFlio manager uses the single-factor model to estimate default risk. What is the mean and standard deviation for the conditional distribution when a specific realized market value m is used?
　　A. The mean and standard deviation are equivalent in the standard normal distribution.
　　B. The mean is βm and the standard deviation is((1-β^2))^1/2
　　C. The mean is m and the standard deviation is ?i ?
　　D. The mean is m and the standard deviation is 1.
　　Answer:
　　1.D
　　When bonds are redeemed to comply with sinking fund provisions, the call price is known as the “special redemption price.” When bonds are redeemed according to the call provisions specified in the bond indenture, the call price is known as “regular redemption price.”
　　2.B
　　The conditional distribution is a nonnal distribution with a mean of βand a standard deviation of ((1-β^2))^1/2