Question 1

Professional management spells safety,because an occasional loss incurred with one bond issue is usually offset by gains from other bond issues in the fund's portfolio.

Accepted Answer

A) True 
 B)False

Question 2

Which website has a brochure entitled,"Saving and Investing: A Roadmap to Your Financial Security Through Saving and Investing?"

Accepted Answer

A) Apple 
B) Google 
C) Bing 
D) Securities and Exchange Commission 
E) Internal Revenue Service 
A) Apple 
B) Google 
C) Bing 
D) Securities and Exchange Commission 
E) Internal Revenue Service

Question 3

Because bonds are considered debt financing that must be repaid at maturity,a corporation's financial difficulties have little effect on the bond's value between the issue date and the maturity date.

Accepted Answer

A) True 
 B)False

Question 4

You are trying to evaluate two bond issues.One bond issue is rated "A" by Moody's; the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback,would you purchase the "A" bond or the "B" bond?

Accepted Answer

To determine the quality and risk associ

Question 5

Bonds are generally considered a relatively safe investment.How is it possible to lose money on bonds?

Accepted Answer

An investor can actually lose money by s

Question 6

To calculate the taxable equivalent yield on a municipal bond:

Accepted Answer

A) divide your tax rate by the result of 1.0 minus your tax-exempt rate 
B) multiply your tax rate by your tax-exempt rate of return 
C) divide your tax rate by your tax-exempt rate of return 
D) divide the tax-exempt rate of return by your tax rate 
E) divide the tax-exempt rate of return by the result of 1.0 minus your tax rate 
A) divide your tax rate by the result of 1.0 minus your tax-exempt rate 
B) multiply your tax rate by your tax-exempt rate of return 
C) divide your tax rate by your tax-exempt rate of return 
D) divide the tax-exempt rate of return by your tax rate 
E) divide the tax-exempt rate of return by the result of 1.0 minus your tax rate

Question 7

Serial bonds are bonds of a single issue that:

Accepted Answer

A) will pay no interest payments. 
B) will mature on the same date. 
C) will mature on different dates. 
D) cannot be called. 
E) will all mature ten years from the date of issue. 
A) will pay no interest payments. 
B) will mature on the same date. 
C) will mature on different dates. 
D) cannot be called. 
E) will all mature ten years from the date of issue.

Question 8

Which bond rating does Standard & Poor's assign to a bond that is in default?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) Z 
A) A 
B) B 
C) C 
D) D 
E) Z

Question 9

The Treasury Department currently sells T-bills with ________ maturities.

Accepted Answer

A) 4-week 
B) 13-week 
C) 26-week 
D) 52-week 
E) All of these 
A) 4-week 
B) 13-week 
C) 26-week 
D) 52-week 
E) All of these

Question 10

What is the approximate market value of a $1,000 corporate bond that pays 6 percent interest when comparable bonds are paying 8 percent interest?

Accepted Answer

A) $60 
B) $80 
C) $750 
D) $1,000 
E) $1,060 
A) $60 
B) $80 
C) $750 
D) $1,000 
E) $1,060

Question 11

If comparable bonds are paying 8 percent and the approximate market value of a $1,000 bond is $1,375,then what is the semiannual interest on the bond?

Accepted Answer

A) $55 
B) $80 
C) $100 
D) $110 
E) $137 
A) $55 
B) $80 
C) $100 
D) $110 
E) $137

Question 12

Which of the following can be purchased through Treasury Direct at www.treasurydirect.gov?

Accepted Answer

A) TIPS 
B) Treasury bills 
C) Treasury notes 
D) Treasury bonds 
E) All of these 
A) TIPS 
B) Treasury bills 
C) Treasury notes 
D) Treasury bonds 
E) All of these

Question 13

When a Treasury bill matures,the investor receives:

Accepted Answer

A) a premium. 
B) the interest only. 
C) the purchase price. 
D) the face value. 
E) a discount. 
A) a premium. 
B) the interest only. 
C) the purchase price. 
D) the face value. 
E) a discount.

Question 14

Cynthia Smith is evaluating a bond investment in ABC company.She is concerned about the corporation's ability to make future interest payments.Determine the company's times interest earned ratio if the company has operating income before interest and taxes of $12,235 million and interest expense of $1,025 million in 2017 and interpret it.

Accepted Answer

Times interest earned = $12,235 / $1,025

Question 15

If a bond is purchased at a price below the face value,the yield to maturity will be:

Accepted Answer

A) greater than the stated interest rate. 
B) the same as the stated interest rate. 
C) less than the stated interest rate. 
D) zero. 
E) of no significance. 
A) greater than the stated interest rate. 
B) the same as the stated interest rate. 
C) less than the stated interest rate. 
D) zero. 
E) of no significance.

Question 16

Which one of the following represents a bond that generally lacks characteristics of a safe investment and is subject to high credit risk?

Accepted Answer

A) Treasury bond 
B) Bond rated B by Standard and Poor's 
C) Bond rated AAA by Standard and Poor's 
D) Insured municipal bond 
E) Treasury bill 
A) Treasury bond 
B) Bond rated B by Standard and Poor's 
C) Bond rated AAA by Standard and Poor's 
D) Insured municipal bond 
E) Treasury bill

Question 17

A $1,000 corporate bond is convertible to 40 shares of the corporation's common stock.What is the minimum price that the stock must obtain before bondholders would consider converting the bond to stock?

Accepted Answer

A) $10 
B) $15 
C) $20 
D) $25 
E) $40 
A) $10 
B) $15 
C) $20 
D) $25 
E) $40

Question 18

Tom McCallister buys a bond that the company can retire before maturity if they wish.What type of bond has Tom purchased?

Accepted Answer

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

Question 19

The current yield on a corporate bond takes into account:

Accepted Answer

A) the bond's face amount. 
B) the interest rate paid by the bond. 
C) dollar amount of interest. 
D) current market value of the bond. 
E) All of these 
A) the bond's face amount. 
B) the interest rate paid by the bond. 
C) dollar amount of interest. 
D) current market value of the bond. 
E) All of these

Question 20

Dave Harris purchased a single bond last year for $987.He knows he will receive $1,000 on March 1,2026.This date is referred to as the ________ date.

Accepted Answer

A) maturity 
B) purchase 
C) record 
D) ex-dividend 
E) declaration 
A) maturity 
B) purchase 
C) record 
D) ex-dividend 
E) declaration

Professional management spells safety,because an occasional loss incurred with one bond issue is usually offset by gains from other bond issues in the fund's portfolio.

Which website has a brochure entitled,"Saving and Investing: A Roadmap to Your Financial Security Through Saving and Investing?"

Because bonds are considered debt financing that must be repaid at maturity,a corporation's financial difficulties have little effect on the bond's value between the issue date and the maturity date.

You are trying to evaluate two bond issues.One bond issue is rated "A" by Moody's; the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback,would you purchase the "A" bond or the "B" bond?

Bonds are generally considered a relatively safe investment.How is it possible to lose money on bonds?

To calculate the taxable equivalent yield on a municipal bond:

Serial bonds are bonds of a single issue that:

Which bond rating does Standard & Poor's assign to a bond that is in default?

The Treasury Department currently sells T-bills with ________ maturities.

What is the approximate market value of a $1,000 corporate bond that pays 6 percent interest when comparable bonds are paying 8 percent interest?

If comparable bonds are paying 8 percent and the approximate market value of a $1,000 bond is $1,375,then what is the semiannual interest on the bond?

Which of the following can be purchased through Treasury Direct at www.treasurydirect.gov?

When a Treasury bill matures,the investor receives:

If a bond is purchased at a price below the face value,the yield to maturity will be:

Which one of the following represents a bond that generally lacks characteristics of a safe investment and is subject to high credit risk?

A $1,000 corporate bond is convertible to 40 shares of the corporation's common stock.What is the minimum price that the stock must obtain before bondholders would consider converting the bond to stock?

Tom McCallister buys a bond that the company can retire before maturity if they wish.What type of bond has Tom purchased?

The current yield on a corporate bond takes into account:

Dave Harris purchased a single bond last year for $987.He knows he will receive $1,000 on March 1,2026.This date is referred to as the ________ date.

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

Exam 15: Investing in Bonds

Professional management spells safety,because an occasional loss incurred with one bond issue is usually offset by gains from other bond issues in the fund's portfolio.

Which website has a brochure entitled,"Saving and Investing: A Roadmap to Your Financial Security Through Saving and Investing?"

Because bonds are considered debt financing that must be repaid at maturity,a corporation's financial difficulties have little effect on the bond's value between the issue date and the maturity date.

You are trying to evaluate two bond issues.One bond issue is rated "A" by Moody's; the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback,would you purchase the "A" bond or the "B" bond?

Bonds are generally considered a relatively safe investment.How is it possible to lose money on bonds?

To calculate the taxable equivalent yield on a municipal bond:

Serial bonds are bonds of a single issue that:

Which bond rating does Standard & Poor's assign to a bond that is in default?

The Treasury Department currently sells T-bills with ________ maturities.

What is the approximate market value of a $1,000 corporate bond that pays 6 percent interest when comparable bonds are paying 8 percent interest?

If comparable bonds are paying 8 percent and the approximate market value of a $1,000 bond is $1,375,then what is the semiannual interest on the bond?

Which of the following can be purchased through Treasury Direct at www.treasurydirect.gov?

When a Treasury bill matures,the investor receives:

If a bond is purchased at a price below the face value,the yield to maturity will be:

Which one of the following represents a bond that generally lacks characteristics of a safe investment and is subject to high credit risk?

A $1,000 corporate bond is convertible to 40 shares of the corporation's common stock.What is the minimum price that the stock must obtain before bondholders would consider converting the bond to stock?

Tom McCallister buys a bond that the company can retire before maturity if they wish.What type of bond has Tom purchased?

The current yield on a corporate bond takes into account:

Dave Harris purchased a single bond last year for $987.He knows he will receive $1,000 on March 1,2026.This date is referred to as the ________ date.

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