Question 1

TIPS are treasury bonds for which the par value changes with the consumer price index.

Accepted Answer

A) True 
 B)False

Question 2

The invoice price of a bond

Accepted Answer

A)  is the price you pay if you buy the bond in the secondary market. 
B)  is the quoted price of the bond. 
C)  is the stated price of the bond plus the bond's accrued interest. 
D)  All of the above 
E)  Only A and C 
A)  is the price you pay if you buy the bond in the secondary market. 
B)  is the quoted price of the bond. 
C)  is the stated price of the bond plus the bond's accrued interest. 
D)  All of the above 
E)  Only A and C

Question 3

For an investor looking for capital gains, preferred stock is preferred over common stock.

Accepted Answer

A) True 
 B)False

Question 4

Any bond that is backed by the pledge of collateral is known as what type of bond?

Accepted Answer

A)  collateralized 
B)  secured 
C)  recalled 
D)  sinking 
E)  agency 
A)  collateralized 
B)  secured 
C)  recalled 
D)  sinking 
E)  agency

Question 5

Which of the following best describes preferred stock?

Accepted Answer

A)  Like an indenture, it represents a legal obligation to the firm to pay dividends. 
B)  Like common stock, it represents an equity claim on the assets and earnings of the firm. 
C)  Like a bond, it pays out a fixed stream of income ahead of any common stock dividends. 
D)  All of the above are correct. 
E)  Only B and C are correct. 
A)  Like an indenture, it represents a legal obligation to the firm to pay dividends. 
B)  Like common stock, it represents an equity claim on the assets and earnings of the firm. 
C)  Like a bond, it pays out a fixed stream of income ahead of any common stock dividends. 
D)  All of the above are correct. 
E)  Only B and C are correct.

Question 6

Treasury bonds are generally viewed as being risk-free, given the government's ability to ________ and ________.

Accepted Answer

A)  tax people; do volume business 
B)  tax corporations; do volume business 
C)  tax; print more money 
D)  print money; do volume business 
E)  none of the above 
A)  tax people; do volume business 
B)  tax corporations; do volume business 
C)  tax; print more money 
D)  print money; do volume business 
E)  none of the above

Question 7

Provide a list of direct and indirect real estate investments. Which one is best for the average investor?

Accepted Answer

Direct - vacation home, commercial prope

Question 8

The advantages of Treasury bonds include

Accepted Answer

A)  there is no default. 
B)  they can't be called in. 
C)  most interest is free of state and local taxes. 
D)  All of the above 
E)  Only A and C 
A)  there is no default. 
B)  they can't be called in. 
C)  most interest is free of state and local taxes. 
D)  All of the above 
E)  Only A and C

Question 9

Your required rate of return on company XYZ's preferred stock is 12%. Their preferred stock pays a fixed annual dividend of $4. A share of XYZ preferred is valued at

Accepted Answer

A)  $4.80 
B)  $33.34 
C)  $48.00 
D)  $54.44 
A)  $4.80 
B)  $33.34 
C)  $48.00 
D)  $54.44

Question 10

Tell what you will find in a bond listing in the Wall Street Journal.

Accepted Answer

The name of the bond will be listed in t

Question 11

When there are changes in the consumer price index, there is a corresponding change in the par value of ________.

Accepted Answer

A)  TIPS 
B)  Series EE bonds 
C)  I Bonds 
D)  Munis 
A)  TIPS 
B)  Series EE bonds 
C)  I Bonds 
D)  Munis

Question 12

Randall has $25,000 and is considering investing in bonds. With this amount of start up money he should look into which of the following bonds?

Accepted Answer

A)  Series EE savings bond 
B)  agency bonds 
C)  corporate bonds 
D)  pass-through certificates 
E)  both B and D would be good choices. 
A)  Series EE savings bond 
B)  agency bonds 
C)  corporate bonds 
D)  pass-through certificates 
E)  both B and D would be good choices.

Question 13

Collectibles such as baseball cards and beanie babies can be fun, but one should not expect them to provide for your financial future.

Accepted Answer

A) True 
 B)False

Question 14

If an asset doesn't earn a return, its value is determined by supply and demand.

Accepted Answer

A) True 
 B)False

Question 15

Coupon interest is usually paid in quarterly installments.

Accepted Answer

A) True 
 B)False

Question 16

The issuer of the bond is effectively loaning money to the bondholder when the bond is purchased.

Accepted Answer

A) True 
 B)False

Question 17

Bonds which are very low rated, yet high yielding bonds are known as junk bonds.

Accepted Answer

A) True 
 B)False

Question 18

The interest rate carried on agency bonds, such as FNMA and FHLB, is ________ the interest rate on Treasury bonds.

Accepted Answer

A)  higher than 
B)  lower than 
C)  usually the same as 
D)  at most half that of 
E)  none of the above 
A)  higher than 
B)  lower than 
C)  usually the same as 
D)  at most half that of 
E)  none of the above

Question 19

Gail used her financial calculator to calculate her bond's yield to maturity. Given the following information what was her yield? N = 10; PV = -880.00; PMT = 100; FV = 1000.

Accepted Answer

A)  10.0% 
B)  8.80% 
C)  10.18% 
D)  12.14% 
E)  none of the above 
A)  10.0% 
B)  8.80% 
C)  10.18% 
D)  12.14% 
E)  none of the above

Question 20

Which of the following is not an example of speculative investing as outlined in the text?

Accepted Answer

A)  gold 
B)  silver 
C)  stocks 
D)  precious stones 
E)  collectibles 
A)  gold 
B)  silver 
C)  stocks 
D)  precious stones 
E)  collectibles

TIPS are treasury bonds for which the par value changes with the consumer price index.

The invoice price of a bond

For an investor looking for capital gains, preferred stock is preferred over common stock.

Any bond that is backed by the pledge of collateral is known as what type of bond?

Which of the following best describes preferred stock?

Treasury bonds are generally viewed as being risk-free, given the government's ability to and .

Provide a list of direct and indirect real estate investments. Which one is best for the average investor?

The advantages of Treasury bonds include

Your required rate of return on company XYZ's preferred stock is 12%. Their preferred stock pays a fixed annual dividend of $4. A share of XYZ preferred is valued at

Tell what you will find in a bond listing in the Wall Street Journal.

When there are changes in the consumer price index, there is a corresponding change in the par value of ________.

Randall has $25,000 and is considering investing in bonds. With this amount of start up money he should look into which of the following bonds?

Collectibles such as baseball cards and beanie babies can be fun, but one should not expect them to provide for your financial future.

If an asset doesn't earn a return, its value is determined by supply and demand.

Coupon interest is usually paid in quarterly installments.

The issuer of the bond is effectively loaning money to the bondholder when the bond is purchased.

Bonds which are very low rated, yet high yielding bonds are known as junk bonds.

The interest rate carried on agency bonds, such as FNMA and FHLB, is ________ the interest rate on Treasury bonds.

Gail used her financial calculator to calculate her bond's yield to maturity. Given the following information what was her yield? N = 10; PV = -880.00; PMT = 100; FV = 1000.

Which of the following is not an example of speculative investing as outlined in the text?

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

TIPS are treasury bonds for which the par value changes with the consumer price index.

The invoice price of a bond

For an investor looking for capital gains, preferred stock is preferred over common stock.

Any bond that is backed by the pledge of collateral is known as what type of bond?

Which of the following best describes preferred stock?

Treasury bonds are generally viewed as being risk-free, given the government's ability to ________ and ________.

Provide a list of direct and indirect real estate investments. Which one is best for the average investor?

The advantages of Treasury bonds include

Your required rate of return on company XYZ's preferred stock is 12%. Their preferred stock pays a fixed annual dividend of $4. A share of XYZ preferred is valued at

Tell what you will find in a bond listing in the Wall Street Journal.

When there are changes in the consumer price index, there is a corresponding change in the par value of ________.

Randall has $25,000 and is considering investing in bonds. With this amount of start up money he should look into which of the following bonds?

Collectibles such as baseball cards and beanie babies can be fun, but one should not expect them to provide for your financial future.

If an asset doesn't earn a return, its value is determined by supply and demand.

Coupon interest is usually paid in quarterly installments.

The issuer of the bond is effectively loaning money to the bondholder when the bond is purchased.

Bonds which are very low rated, yet high yielding bonds are known as junk bonds.

The interest rate carried on agency bonds, such as FNMA and FHLB, is ________ the interest rate on Treasury bonds.

Gail used her financial calculator to calculate her bond's yield to maturity. Given the following information what was her yield? N = 10; PV = -880.00; PMT = 100; FV = 1000.

Which of the following is not an example of speculative investing as outlined in the text?

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

Treasury bonds are generally viewed as being risk-free, given the government's ability to and .