Matching Exercise: Match the type of bond to its definition. Matching Exercise: Match the type of bond to its definition. a) The Catastrophe Bond: (Click to select) b) A Warrant Bond: (Click to select) c) An Income bond: (Click to select) d) A Convertible bond: (Click to select) e) A Put bond: (Click to select)

The Catastrophe Bond: covers hurricanes and earthquakes in the U.S.

b) A Warrant Bond: gives the buyer of a bond the right to purchase shares of stock in the company at a fixed price.

An Income bond: states that the bond's coupon payment depends on company income.

c)

Put Bond : allows the holder to force the issuer to buy back the bond at a stated price.

Convertible bond : can be swapped for a fixed number of shares of stock anytime before maturity at the holder's option. .  

Explanation:

A catastrophe bond debt instrument usually used by insurance companies. They are usually high yield.  The issuer of this type of bond receives money only if specified conditions occur e.g. flood

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