Exam 15: Investing in Bonds

Sandra Peterson has been thinking about investing in corporate bonds.She is concerned about safety and wants the most secure bond investment possible.She would most likely invest in ________ bonds.

Which one of the following statements is true?

Which of the following is a fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue?

Corporate bonds are a form of equity financing that does not have to be repaid.

A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest.

If the terms of the sinking fund provision are not met,the ________ may take legal action against the company on behalf of the bondholders.

For government bonds,the bid price is the maximum price that a buyer is willing to pay for a government security.

If comparable bonds are paying 6 percent and the approximate market price of a $1,000 bond is $850,then what is the annual interest on the bond?

Although there is a great deal of information on the internet about stock investments,it is impossible to evaluate bonds using the internet.

A registered bond is a bond whose ownership is listed in the owner's name by the issuing company.

Since 2000,bond yields for high-quality corporate bonds have increased significantly.

In addition to those issued by the Treasury Department,debt securities are issued by federal agencies,including Fannie Mae,Ginnie Mae,and Freddie Mac.

You own a $1,000 bond that pays 9 percent interest.What is the amount of interest you will receive each six months?

With a ________,only the registered owner can collect the principal at maturity,but interest payments can be paid to anyone who presents one of the detachable coupons.

A subordinated debenture is a more secure investment than a mortgage bond.

Maturity dates for corporate bonds generally range from 1 to 10 years.

When investors purchase bonds that mature at regular intervals in order to balance risk and return,they are creating a:

Insured municipal bonds offer slightly lower interest rates than uninsured bonds because of the reduced risk of default.

If a bond is quoted in the newspaper at 103,the current price of a $1,000 face value bond is:

Dave Harris has just purchased a bond with a face value of $1,000 that pays 4 percent.The purchase price of the bond was $950,and the bond will mature in 5 years.What is the yield to maturity for this bond (round to the nearest tenth of a percent)?