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Which TWO of the following would be the most convincing reasons for the advance-refunding of a municipal bond issue? I. Indenture covenants on the municipal bond that are restrictive II. A trend of increasing interest rates III. The complete lack of indenture covenants on the municipal bond IV. A trend of decreasing interest rates

Respuesta :

estryzy

Answer:

I. Indenture covenants on the municipal bond that are restrictive

IV. A trend of decreasing interest rates

Explanation:

Advance refunding of a municipal bond issue is usually carried out with the aim of removing a restrictive covenant, to provide the issuer with the ability to issue out more bonds. Another reason for advance refunding is also to reduce the costs of interest at the times when there is a decline in the interest rates.

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