Question 1

When a bond is bought at a premium price above its par value,the current yield will be lower than the coupon rate.

Accepted Answer

A) True 
 B)False

Question 2

In the event that a corporation files for bankruptcy,bond trustees have the power to

Accepted Answer

A)  issue new bonds. 
B)  recall outstanding bonds. 
C)  sell the corporations secured assets and use the proceeds to pay the bondholders. 
D)  change the interest rate on outstanding bonds. 
A)  issue new bonds. 
B)  recall outstanding bonds. 
C)  sell the corporations secured assets and use the proceeds to pay the bondholders. 
D)  change the interest rate on outstanding bonds.

Question 3

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 4

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.

Question 5

Bond issuers may do something very important for the bondholder that increases the probability the debt will be successfully paid off at maturity.The issuer

Accepted Answer

A)  establishes a sinking fund. 
B)  sets a fixed interest rate. 
C)  has the bond indentured. 
D)  has the bond deferred. 
A)  establishes a sinking fund. 
B)  sets a fixed interest rate. 
C)  has the bond indentured. 
D)  has the bond deferred.

Question 6

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 7

A corporation that issues preferred stock will mostly likely call the stock when the market rates of interest increase.

Accepted Answer

A) True 
 B)False

Question 8

What are the major differences between preferred stock and common stock?

Accepted Answer

A)  Preferred stock dividends are paid out before dividends on common stock can be issued. 
B)  Common stock has voting rights and preferred stock does not. 
C)  Common stock has potentially higher capital gains than preferred stock. 
D)  All of the above are correct. 
E)  Only A and B are correct. 
A)  Preferred stock dividends are paid out before dividends on common stock can be issued. 
B)  Common stock has voting rights and preferred stock does not. 
C)  Common stock has potentially higher capital gains than preferred stock. 
D)  All of the above are correct. 
E)  Only A and B are correct.

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

How would you go about rating bonds as a possible investment?

Accepted Answer

Practically speaking,the first thing to

Question 11

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?

Accepted Answer

A)  $33.33 
B)  $50.00 
C)  $66.66 
D)  $100.00 
E)  None of the above 
A)  $33.33 
B)  $50.00 
C)  $66.66 
D)  $100.00 
E)  None of the above

Question 12

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?

Accepted Answer

A)  18.89% 
B)  19.00% 
C)  21.75% 
D)  48.27% 
E)  44.96% 
A)  18.89% 
B)  19.00% 
C)  21.75% 
D)  48.27% 
E)  44.96%

Question 13

How do you determine a bond's valuation?

Accepted Answer

The simplest way is to use a f

Question 14

When is it OK to speculate?

Accepted Answer

It is OK to speculate when you have some

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  return price 
B)  par value 
C)  dead price 
D)  market price 
E)  none of the above 
A)  return price 
B)  par value 
C)  dead price 
D)  market price 
E)  none of the above

Question 19

Suppose you just purchased a corporate bond with a par value of $1,000 for $951.25.It carries a 7% coupon rate and will mature in 5 years.What is the yield to maturity?

Accepted Answer

A)  6.14% 
B)  7% 
C)  8.23% 
D)  12% 
A)  6.14% 
B)  7% 
C)  8.23% 
D)  12%

Question 20

________ bonds are sold electronically,and they are now sold at face value;that is,you pay $50 for a $50 bond.

Accepted Answer

A)  Electronic Series EE 
B)  I 
C)  Paper Series EE 
D)  Only A and B 
A)  Electronic Series EE 
B)  I 
C)  Paper Series EE 
D)  Only A and B

When a bond is bought at a premium price above its par value,the current yield will be lower than the coupon rate.

In the event that a corporation files for bankruptcy,bond trustees have the power to

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

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

Bond issuers may do something very important for the bondholder that increases the probability the debt will be successfully paid off at maturity.The issuer

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

A corporation that issues preferred stock will mostly likely call the stock when the market rates of interest increase.

What are the major differences between preferred stock and common stock?

Why might you consider investing in bonds?

How would you go about rating bonds as a possible investment?

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?

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?

How do you determine a bond's valuation?

When is it OK to speculate?

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

The advantages of Treasury bonds include

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

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

Suppose you just purchased a corporate bond with a par value of $1,000 for $951.25.It carries a 7% coupon rate and will mature in 5 years.What is the yield to maturity?

________ bonds are sold electronically,and they are now sold at face value;that is,you pay $50 for a $50 bond.

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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

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Exam 13: Investing in Bonds and Other Alternatives

When a bond is bought at a premium price above its par value,the current yield will be lower than the coupon rate.

In the event that a corporation files for bankruptcy,bond trustees have the power to

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

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

Bond issuers may do something very important for the bondholder that increases the probability the debt will be successfully paid off at maturity.The issuer

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

A corporation that issues preferred stock will mostly likely call the stock when the market rates of interest increase.

What are the major differences between preferred stock and common stock?

Why might you consider investing in bonds?

How would you go about rating bonds as a possible investment?

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?

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?

How do you determine a bond's valuation?

When is it OK to speculate?

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

The advantages of Treasury bonds include

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

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

Suppose you just purchased a corporate bond with a par value of $1,000 for $951.25.It carries a 7% coupon rate and will mature in 5 years.What is the yield to maturity?

________ bonds are sold electronically,and they are now sold at face value;that is,you pay $50 for a $50 bond.

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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