Question 1

If you were to own a stock that offers voting rights and may pay dividends, you would most likely own ________ stock.

Accepted Answer

A)  preferred 
B)  common 
C)  mutual fund 
D)  bond-value 
E)  none of the above 
A)  preferred 
B)  common 
C)  mutual fund 
D)  bond-value 
E)  none of the above B

Question 2

When you are holding preferred stock that you can exchange for a predetermined number of shares of common stock, you are holding ________ stock.

Accepted Answer

A)  reissued preferred 
B)  migratory preferred 
C)  convertible preferred 
D)  class B common 
E)  none of the above 
A)  reissued preferred 
B)  migratory preferred 
C)  convertible preferred 
D)  class B common 
E)  none of the above C

Question 3

Gold, precious gems, and other collectibles always earn handsome returns.

Accepted Answer

A) True 
 B)False  False

Question 4

The par value of the bond is the rate at which payments will be made to the bondholder annually, in the form of interest.

Accepted Answer

A) True 
 B)False

Question 5

Since 1980 the price of gold

Accepted Answer

A)  has been fairly constant. 
B)  has steadily risen. 
C)  has steadily fallen. 
D)  has bounced up and down. 
A)  has been fairly constant. 
B)  has steadily risen. 
C)  has steadily fallen. 
D)  has bounced up and down.

Question 6

For a long-term investor, the yield to maturity is the most important yield to determine.

Accepted Answer

A) True 
 B)False

Question 7

The corporate bond that you own is backed by the corporation's Houston, Texas real estate holdings. If the company defaults, these holdings could be liquidated to repay the debt. This is an example of a ________ bond.

Accepted Answer

A)  mortgage 
B)  debenture 
C)  liquidation 
D)  credit 
E)  none of the above 
A)  mortgage 
B)  debenture 
C)  liquidation 
D)  credit 
E)  none of the above

Question 8

The face value of a bond, or the amount that is returned to the bondholder at maturity is also known as the bond's denomination.

Accepted Answer

A) True 
 B)False

Question 9

Why might you consider investing in bonds?

Accepted Answer

A)  Bonds reduce risk through diversification. 
B)  Bonds produce steady income. 
C)  Bonds can be safe investment if held to maturity. 
D)  all of the above 
A)  Bonds reduce risk through diversification. 
B)  Bonds produce steady income. 
C)  Bonds can be safe investment if held to maturity. 
D)  all of the above

Question 10

What is the par value of a corporate bond that was issued with an 9% annual coupon, pays $45 in semiannual interest, and is due in 15 years?

Accepted Answer

A)  $1,000.00 
B)  $1,070.23 
C)  $1,080.00 
D)  $1,167.33 
A)  $1,000.00 
B)  $1,070.23 
C)  $1,080.00 
D)  $1,167.33

Question 11

Which of the following bonds would be appropriate for a retired person seeking a stream of income during retirement?

Accepted Answer

A)  U.S. Treasury 
B)  Investment grade corporate bond 
C)  Municipal bond 
D)  All of the above are correct. 
A)  U.S. Treasury 
B)  Investment grade corporate bond 
C)  Municipal bond 
D)  All of the above are correct.

Question 12

An I bond is an accrual-type bond, meaning that interest is added to the value of the bond and paid when the bond is cashed in.

Accepted Answer

A) True 
 B)False

Question 13

You own a(n) ________ certificate, which is a certificate that represents a portion of ownership in a pool of federally insured mortgages.

Accepted Answer

A)  interest 
B)  mortgage bond 
C)  collateral 
D)  pass-through 
E)  none of the above 
A)  interest 
B)  mortgage bond 
C)  collateral 
D)  pass-through 
E)  none of the above

Question 14

Suppose that you just purchased a $1,000 Treasury Inflation-Indexed Bond which carried an original interest rate of 3.375%. The consumer price index just increased by 5% increasing the par value of the bond to $1,050. What is your interest payment considering this change?

Accepted Answer

A)  $31.75 
B)  $33.75 
C)  $35.44 
D)  $50.00 
E)  $52.50 
A)  $31.75 
B)  $33.75 
C)  $35.44 
D)  $50.00 
E)  $52.50

Question 15

Bonds that do not pay interest are known as no-load bonds.

Accepted Answer

A) True 
 B)False

Question 16

Because junk bonds carry a much higher risk of default, they also carry an interest rate ________ percent above the AAA grade long-term bonds.

Accepted Answer

A)  1 ‑2 
B)  3 ‑6 
C)  7 ‑9 
D)  10 ‑12 
E)  20 ‑25 
A)  1 ‑2 
B)  3 ‑6 
C)  7 ‑9 
D)  10 ‑12 
E)  20 ‑25

Question 17

The yield to maturity for a bond with eight years to maturity, with a face value of $1,000, pays ten percent annual coupon and currently sells for $1,950, is five percent.

Accepted Answer

A) True 
 B)False

Question 18

If you were considering the purchase of a bond issued by a state, county, or city you would be considering the purchase of a ________ bond.

Accepted Answer

A)  state 
B)  municipal 
C)  government hedge 
D)  corporate 
E)  none of the above 
A)  state 
B)  municipal 
C)  government hedge 
D)  corporate 
E)  none of the above

Question 19

It is possible to make fortunes dealing in collectibles.

Accepted Answer

A) True 
 B)False

Question 20

What could happen if you sell a bond before its maturity date?

Accepted Answer

A)  You could have a capital gain. 
B)  You could have a capital loss. 
C)  You could break even with the price you paid for the bond. 
D)  All of the above are correct. 
E)  Only A and C are correct. 
A)  You could have a capital gain. 
B)  You could have a capital loss. 
C)  You could break even with the price you paid for the bond. 
D)  All of the above are correct. 
E)  Only A and C are correct.

If you were to own a stock that offers voting rights and may pay dividends, you would most likely own ________ stock.

When you are holding preferred stock that you can exchange for a predetermined number of shares of common stock, you are holding ________ stock.

Gold, precious gems, and other collectibles always earn handsome returns.

The par value of the bond is the rate at which payments will be made to the bondholder annually, in the form of interest.

Since 1980 the price of gold

For a long-term investor, the yield to maturity is the most important yield to determine.

The corporate bond that you own is backed by the corporation's Houston, Texas real estate holdings. If the company defaults, these holdings could be liquidated to repay the debt. This is an example of a ________ bond.

The face value of a bond, or the amount that is returned to the bondholder at maturity is also known as the bond's denomination.

Why might you consider investing in bonds?

What is the par value of a corporate bond that was issued with an 9% annual coupon, pays $45 in semiannual interest, and is due in 15 years?

Which of the following bonds would be appropriate for a retired person seeking a stream of income during retirement?

An I bond is an accrual-type bond, meaning that interest is added to the value of the bond and paid when the bond is cashed in.

You own a(n) ________ certificate, which is a certificate that represents a portion of ownership in a pool of federally insured mortgages.

Suppose that you just purchased a $1,000 Treasury Inflation-Indexed Bond which carried an original interest rate of 3.375%. The consumer price index just increased by 5% increasing the par value of the bond to $1,050. What is your interest payment considering this change?

Bonds that do not pay interest are known as no-load bonds.

Because junk bonds carry a much higher risk of default, they also carry an interest rate ________ percent above the AAA grade long-term bonds.

The yield to maturity for a bond with eight years to maturity, with a face value of $1,000, pays ten percent annual coupon and currently sells for $1,950, is five percent.

If you were considering the purchase of a bond issued by a state, county, or city you would be considering the purchase of a ________ bond.

It is possible to make fortunes dealing in collectibles.

What could happen if you sell a bond before its maturity date?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 14: Investing in Bonds and Other Alternatives

If you were to own a stock that offers voting rights and may pay dividends, you would most likely own ________ stock.

When you are holding preferred stock that you can exchange for a predetermined number of shares of common stock, you are holding ________ stock.

Gold, precious gems, and other collectibles always earn handsome returns.

The par value of the bond is the rate at which payments will be made to the bondholder annually, in the form of interest.

Since 1980 the price of gold

For a long-term investor, the yield to maturity is the most important yield to determine.

The corporate bond that you own is backed by the corporation's Houston, Texas real estate holdings. If the company defaults, these holdings could be liquidated to repay the debt. This is an example of a ________ bond.

The face value of a bond, or the amount that is returned to the bondholder at maturity is also known as the bond's denomination.

Why might you consider investing in bonds?

What is the par value of a corporate bond that was issued with an 9% annual coupon, pays $45 in semiannual interest, and is due in 15 years?

Which of the following bonds would be appropriate for a retired person seeking a stream of income during retirement?

An I bond is an accrual-type bond, meaning that interest is added to the value of the bond and paid when the bond is cashed in.

You own a(n) ________ certificate, which is a certificate that represents a portion of ownership in a pool of federally insured mortgages.

Suppose that you just purchased a $1,000 Treasury Inflation-Indexed Bond which carried an original interest rate of 3.375%. The consumer price index just increased by 5% increasing the par value of the bond to $1,050. What is your interest payment considering this change?

Bonds that do not pay interest are known as no-load bonds.

Because junk bonds carry a much higher risk of default, they also carry an interest rate ________ percent above the AAA grade long-term bonds.

The yield to maturity for a bond with eight years to maturity, with a face value of $1,000, pays ten percent annual coupon and currently sells for $1,950, is five percent.

If you were considering the purchase of a bond issued by a state, county, or city you would be considering the purchase of a ________ bond.

It is possible to make fortunes dealing in collectibles.

What could happen if you sell a bond before its maturity date?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters