Exam 14: Investing in Bonds and Other Alternatives

One of the problems with most bonds is that their coupon payment is fixed and rising inflation weakens the purchasing power of their coupon payments. Which of the following bonds is the best option during times of high inflation?

When a(n) ________ savings bond is purchased, its price is one-half its face value, with face values ranging from $50 to $10,000.

Preferred stock is similar to bonds in that its dividends are of a fixed size and are paid before common stock dividends are paid.

What is the purpose of the call provision on some bonds?

Which of the following starts off with the highest risk bond and ends with the lowest risk bond?

There are dangers present in bond investing. Tell everyone what they all are.

According to your textbook, when you are investing in gold, silver, gems, and collectibles you are actually ________.

How do you determine a bond's valuation?

You have a corporate bond that pays interest every six months. Its par value is $1,000 and it carries a coupon rate of 10%. What is your accrued interest on the bond if it has been four months since interest was last paid?

Interest payments on municipal bonds are exempt from federal taxes and state taxes as long as you live in the state in which the bonds were issued.

Governments issue savings bonds such as the Series EE bonds in an attempt to meet the investing needs of the small investor.

Why does preferred stock not have the potential for capital gains like common stock does?

Outline, with a brief description, the different types of bonds.

A firm can only have one issue of preferred stock available at any one point in time.

A bond's coupon interest rate is a factor if its market price.

A bond has a par value of $1,000, a market price of $300, and a 9% coupon rate. It will mature in 5 years. What is the current yield of the bond?

The bond that you own does not pay any interest. Instead, it is sold at a "discount" from its maturity value. This is a ________ bond.

Why are the tax implications of investing in bonds more involved than the tax implications of investing in common stock?

What is the best strategy recommended in your textbook for collectibles?

The ________ is the face value of a bond, and the amount that is returned to the bondholder at maturity.