Question 1

The highest bond rating issued by Moody's is:

Accepted Answer

A) AAA. 
B) Aaa. 
C) A+. 
D) BB. 
E) AA. 
A) AAA. 
B) Aaa. 
C) A+. 
D) BB. 
E) AA.

Question 2

Although unpopular a few years back,more and more U.S.corporations are issuing bearer bonds.

Accepted Answer

A) True 
 B)False

Question 3

Treasury bills:

Accepted Answer

A) are rated by Moody's. 
B) pay interest every six months. 
C) are long-term securities issued by the federal government. 
D) are discounted securities. 
E) pay a higher interest rate than corporate bonds. 
A) are rated by Moody's. 
B) pay interest every six months. 
C) are long-term securities issued by the federal government. 
D) are discounted securities. 
E) pay a higher interest rate than corporate bonds.

Question 4

A government security issued in minimum units of $100 with maturities that are one year or less is called a:

Accepted Answer

A) subordinated bond. 
B) Treasury bill. 
C) Treasury note. 
D) Treasury bond. 
E) savings bond. 
A) subordinated bond. 
B) Treasury bill. 
C) Treasury note. 
D) Treasury bond. 
E) savings bond.

Question 5

A bond that is backed only by the reputation of the issuing corporation is called a(n)________ bond.

Accepted Answer

A) debenture 
B) mortgage 
C) indenture 
D) preemptive 
E) treasury 
A) debenture 
B) mortgage 
C) indenture 
D) preemptive 
E) treasury

Question 6

Which one of the following statements is false?

Accepted Answer

A) The U.S.government sells bonds to obtain financing. 
B) U)S.government securities carry a decreased risk of default. 
C) Interest on U.S.government securities is taxable for federal income tax purposes. 
D) Most individual investors that purchase Treasury securities bid competitively. 
E) Treasury securities may be purchased directly from banks or brokers. 
A) The U.S.government sells bonds to obtain financing. 
B) U)S.government securities carry a decreased risk of default. 
C) Interest on U.S.government securities is taxable for federal income tax purposes. 
D) Most individual investors that purchase Treasury securities bid competitively. 
E) Treasury securities may be purchased directly from banks or brokers.

Question 7

Corporate and Treasury bonds generally produce more interest revenue than municipal bonds.Why do investors choose to buy municipal bonds?

Accepted Answer

One of the most important features of mu

Question 8

Doug Emery purchased a bond that can be exchanged for a set number of shares of the issuer's common stock.What type of bond has Doug purchased?

Accepted Answer

A) Debenture 
B) Subordinated debenture 
C) Convertible 
D) Callable 
E) High-yield 
A) Debenture 
B) Subordinated debenture 
C) Convertible 
D) Callable 
E) High-yield

Question 9

Which one of the following statements is correct regarding bond and stock differences?

Accepted Answer

A) Stock is a form of debt financing. 
B) Stock must be repaid at maturity. 
C) Bonds are a form of debt financing. 
D) Bonds do not have to be repaid at maturity. 
E) Interest payments to bondholders are paid at the discretion of the board of directors. 
A) Stock is a form of debt financing. 
B) Stock must be repaid at maturity. 
C) Bonds are a form of debt financing. 
D) Bonds do not have to be repaid at maturity. 
E) Interest payments to bondholders are paid at the discretion of the board of directors.

Question 10

Anyone who is in physical possession of a ________ can collect interest payments and the face value of the bond at maturity regardless of whether or not they are the rightful owner.

Accepted Answer

A) corporate bond 
B) registered coupon bond 
C) bearer bond 
D) money market account 
E) savings bond 
A) corporate bond 
B) registered coupon bond 
C) bearer bond 
D) money market account 
E) savings bond

Question 11

The financially independent firm that acts as the bondholders' representative is the:

Accepted Answer

A) chairman of the board. 
B) president of the corporation. 
C) debenture holder. 
D) indenture holder. 
E) trustee. 
A) chairman of the board. 
B) president of the corporation. 
C) debenture holder. 
D) indenture holder. 
E) trustee.

Question 12

A government security issued in minimum units of $100 with a 30-year maturity is called a:

Accepted Answer

A) subordinated bond. 
B) Treasury bill. 
C) Treasury note. 
D) Treasury bond. 
E) savings bond. 
A) subordinated bond. 
B) Treasury bill. 
C) Treasury note. 
D) Treasury bond. 
E) savings bond.

Question 13

Which one of the following statements is false regarding corporate bonds?

Accepted Answer

A) It is possible to obtain information about a corporation that issues a bond by accessing the corporation's website on the internet. 
B) Price information about corporate bonds is available on the internet. 
C) You can research bonds online but you cannot trade them online. 
D) There are fewer websites that provide information on bonds as compared to websites that provide information on stocks. 
E) Many of the better bond websites charge a fee to access their research. 
A) It is possible to obtain information about a corporation that issues a bond by accessing the corporation's website on the internet. 
B) Price information about corporate bonds is available on the internet. 
C) You can research bonds online but you cannot trade them online. 
D) There are fewer websites that provide information on bonds as compared to websites that provide information on stocks. 
E) Many of the better bond websites charge a fee to access their research.

Question 14

According to Moody's,bonds with extremely poor prospects for recovery of principal or interest are rated:

Accepted Answer

A) A- 
B) B- 
C) C 
D) E 
E) F 
A) A- 
B) B- 
C) C 
D) E 
E) F

Question 15

For 2018,bond yields for high-quality corporate bonds have been approximately how much?

Accepted Answer

A) 2% 
B) 4% 
C) 5% 
D) 7% 
E) 10% 
A) 2% 
B) 4% 
C) 5% 
D) 7% 
E) 10%

Question 16

What is the difference between a U.S.government Treasury bill,Treasury note,and Treasury bond?

Accepted Answer

Treasury bills,sometimes called T-bills,

Question 17

Dave Johnson's objective was to purchase a government bond that provided some protection against inflation as measured by the consumer price index.To fulfill this objective,John purchased a:

Accepted Answer

A) T-bill. 
B) T-note. 
C) T-bond. 
D) TIPS. 
E) general obligation bond. 
A) T-bill. 
B) T-note. 
C) T-bond. 
D) TIPS. 
E) general obligation bond.

Question 18

A corporate bond rated B by Moody's would be suitable for:

Accepted Answer

A) every investor. 
B) very cautious investors. 
C) speculators. 
D) no one because the bond issue is in default. 
E) investors who are highly dependent upon the interest income. 
A) every investor. 
B) very cautious investors. 
C) speculators. 
D) no one because the bond issue is in default. 
E) investors who are highly dependent upon the interest income.

Question 19

Which of the following can cause the price of a corporate bond to fluctuate until the maturity date?

Accepted Answer

A) Changes in overall interest rates in the economy 
B) The financial condition of the company issuing the bond 
C) The factors of supply and demand 
D) An upturn or downturn in the economy 
E) All of these 
A) Changes in overall interest rates in the economy 
B) The financial condition of the company issuing the bond 
C) The factors of supply and demand 
D) An upturn or downturn in the economy 
E) All of these

Question 20

Scott Turner has a bond with 10 years to maturity,a face value of $1,000,annual interest of $60,and a market price of $600.What is the yield-to-maturity on this bond?

Accepted Answer

A) 6.0 percent 
B) 10.0 percent 
C) 11.0 percent 
D) 11.5 percent 
E) 12.5 percent 
A) 6.0 percent 
B) 10.0 percent 
C) 11.0 percent 
D) 11.5 percent 
E) 12.5 percent

The highest bond rating issued by Moody's is:

Although unpopular a few years back,more and more U.S.corporations are issuing bearer bonds.

Treasury bills:

A government security issued in minimum units of $100 with maturities that are one year or less is called a:

A bond that is backed only by the reputation of the issuing corporation is called a(n)________ bond.

Which one of the following statements is false?

Corporate and Treasury bonds generally produce more interest revenue than municipal bonds.Why do investors choose to buy municipal bonds?

Doug Emery purchased a bond that can be exchanged for a set number of shares of the issuer's common stock.What type of bond has Doug purchased?

Which one of the following statements is correct regarding bond and stock differences?

Anyone who is in physical possession of a ________ can collect interest payments and the face value of the bond at maturity regardless of whether or not they are the rightful owner.

The financially independent firm that acts as the bondholders' representative is the:

A government security issued in minimum units of $100 with a 30-year maturity is called a:

Which one of the following statements is false regarding corporate bonds?

According to Moody's,bonds with extremely poor prospects for recovery of principal or interest are rated:

For 2018,bond yields for high-quality corporate bonds have been approximately how much?

What is the difference between a U.S.government Treasury bill,Treasury note,and Treasury bond?

Dave Johnson's objective was to purchase a government bond that provided some protection against inflation as measured by the consumer price index.To fulfill this objective,John purchased a:

A corporate bond rated B by Moody's would be suitable for:

Which of the following can cause the price of a corporate bond to fluctuate until the maturity date?

Scott Turner has a bond with 10 years to maturity,a face value of $1,000,annual interest of $60,and a market price of $600.What is the yield-to-maturity on this bond?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 15: Investing in Bonds

The highest bond rating issued by Moody's is:

Although unpopular a few years back,more and more U.S.corporations are issuing bearer bonds.

Treasury bills:

A government security issued in minimum units of $100 with maturities that are one year or less is called a:

A bond that is backed only by the reputation of the issuing corporation is called a(n)________ bond.

Which one of the following statements is false?

Corporate and Treasury bonds generally produce more interest revenue than municipal bonds.Why do investors choose to buy municipal bonds?

Doug Emery purchased a bond that can be exchanged for a set number of shares of the issuer's common stock.What type of bond has Doug purchased?

Which one of the following statements is correct regarding bond and stock differences?

Anyone who is in physical possession of a ________ can collect interest payments and the face value of the bond at maturity regardless of whether or not they are the rightful owner.

The financially independent firm that acts as the bondholders' representative is the:

A government security issued in minimum units of $100 with a 30-year maturity is called a:

Which one of the following statements is false regarding corporate bonds?

According to Moody's,bonds with extremely poor prospects for recovery of principal or interest are rated:

For 2018,bond yields for high-quality corporate bonds have been approximately how much?

What is the difference between a U.S.government Treasury bill,Treasury note,and Treasury bond?

Dave Johnson's objective was to purchase a government bond that provided some protection against inflation as measured by the consumer price index.To fulfill this objective,John purchased a:

A corporate bond rated B by Moody's would be suitable for:

Which of the following can cause the price of a corporate bond to fluctuate until the maturity date?

Scott Turner has a bond with 10 years to maturity,a face value of $1,000,annual interest of $60,and a market price of $600.What is the yield-to-maturity on this bond?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters