Question 1

Vacation homes are the most popular of all the direct real estate investments.

Accepted Answer

A) True 
 B)False

Question 2

When a bond is described as AA,what does this refer to?

Accepted Answer

A)  A bond that has above average coupon payments 
B)  A bond that has above average yield to maturity 
C)  A bond rating of "very strong" capacity to pay interest and principle repayment 
D)  All of the above are correct. 
E)  Only A and C are correct. 
A)  A bond that has above average coupon payments 
B)  A bond that has above average yield to maturity 
C)  A bond rating of "very strong" capacity to pay interest and principle repayment 
D)  All of the above are correct. 
E)  Only A and C are correct.

Question 3

A corporate bond with a face value of $1,000 is currently selling at par,and pays an 8% yield to maturity.Which of the following statements concerning this bond is true?

Accepted Answer

A)  Its current market price is $1,000. 
B)  Its current semi-annual coupon payment is $40. 
C)  Its current yield is 8%. 
D)  All of the above are correct. 
E)  Only B and C are correct. 
A)  Its current market price is $1,000. 
B)  Its current semi-annual coupon payment is $40. 
C)  Its current yield is 8%. 
D)  All of the above are correct. 
E)  Only B and C are correct.

Question 4

Most corporate bonds are tax-free bonds in the state the corporation is based in.

Accepted Answer

A) True 
 B)False

Question 5

How can you improve your chances when investing in bonds?

Accepted Answer

As with investing in common stock,invest

Question 6

If you are already retired and seek additional income,then bonds as an investment choice would be wise.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Alice recently bought dozens of collectable Barbie dolls.What ultimately will determine the investment value of Alice's Barbies when she goes to resell them?

Accepted Answer

A)  Its return 
B)  Its cost 
C)  Book value 
D)  Supply and demand 
E)  None of the above 
A)  Its return 
B)  Its cost 
C)  Book value 
D)  Supply and demand 
E)  None of the above

Question 9

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.

Accepted Answer

A)  no interest 
B)  face discount 
C)  growth 
D)  zero coupon 
E)  none of the above 
A)  no interest 
B)  face discount 
C)  growth 
D)  zero coupon 
E)  none of the above

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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 12

Pedro is trying to take advantage of the bond valuation relationships.He has figured out that when you expect interest rates to go up,buy ________ bonds and when you expect interest rates to go down,buy ________.

Accepted Answer

A)  government bonds; short-term bonds 
B)  interest-indexed bonds; long-term bonds 
C)  very long-term; bonds with very short-term maturities that are not callable 
D)  very short-term; bonds with very long-term maturities that are not callable 
E)  interest-proof; long-term bonds 
A)  government bonds; short-term bonds 
B)  interest-indexed bonds; long-term bonds 
C)  very long-term; bonds with very short-term maturities that are not callable 
D)  very short-term; bonds with very long-term maturities that are not callable 
E)  interest-proof; long-term bonds

Question 13

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 14

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 15

Provide an explanation of the basic bond terminology and features.

Accepted Answer

A bond has a par value,or face value,whi

Question 16

What is the purpose of the sinking fund?

Accepted Answer

A)  To force the issuing company to save money to retire the bonds at maturity 
B)  To raise outside capital to sink back into the company 
C)  To cause the coupon rate to increase 
D)  None of the above is correct. 
A)  To force the issuing company to save money to retire the bonds at maturity 
B)  To raise outside capital to sink back into the company 
C)  To cause the coupon rate to increase 
D)  None of the above is correct.

Question 17

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 18

Corporations receive a tax break on the dividend income from preferred stock.

Accepted Answer

A) True 
 B)False

Question 19

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 20

A bond with a speculative rating will have which of the following characteristics?

Accepted Answer

A)  A high coupon yield 
B)  A high yield to maturity 
C)  Double BB or lower rating 
D)  All of the above are correct. 
E)  Only A and B are correct. 
A)  A high coupon yield 
B)  A high yield to maturity 
C)  Double BB or lower rating 
D)  All of the above are correct. 
E)  Only A and B are correct.

Vacation homes are the most popular of all the direct real estate investments.

When a bond is described as AA,what does this refer to?

A corporate bond with a face value of $1,000 is currently selling at par,and pays an 8% yield to maturity.Which of the following statements concerning this bond is true?

Most corporate bonds are tax-free bonds in the state the corporation is based in.

How can you improve your chances when investing in bonds?

If you are already retired and seek additional income,then bonds as an investment choice would be wise.

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

Alice recently bought dozens of collectable Barbie dolls.What ultimately will determine the investment value of Alice's Barbies when she goes to resell them?

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.

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

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

Pedro is trying to take advantage of the bond valuation relationships.He has figured out that when you expect interest rates to go up,buy bonds and when you expect interest rates to go down,buy .

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.

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.

Provide an explanation of the basic bond terminology and features.

What is the purpose of the sinking fund?

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

Corporations receive a tax break on the dividend income from preferred stock.

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?

A bond with a speculative rating will have which of the following characteristics?

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

Exam 13: Investing in Bonds and Other Alternatives

Vacation homes are the most popular of all the direct real estate investments.

When a bond is described as AA,what does this refer to?

A corporate bond with a face value of $1,000 is currently selling at par,and pays an 8% yield to maturity.Which of the following statements concerning this bond is true?

Most corporate bonds are tax-free bonds in the state the corporation is based in.

How can you improve your chances when investing in bonds?

If you are already retired and seek additional income,then bonds as an investment choice would be wise.

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

Alice recently bought dozens of collectable Barbie dolls.What ultimately will determine the investment value of Alice's Barbies when she goes to resell them?

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.

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

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

Pedro is trying to take advantage of the bond valuation relationships.He has figured out that when you expect interest rates to go up,buy ________ bonds and when you expect interest rates to go down,buy ________.

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.

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.

Provide an explanation of the basic bond terminology and features.

What is the purpose of the sinking fund?

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

Corporations receive a tax break on the dividend income from preferred stock.

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?

A bond with a speculative rating will have which of the following characteristics?

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

Pedro is trying to take advantage of the bond valuation relationships.He has figured out that when you expect interest rates to go up,buy bonds and when you expect interest rates to go down,buy .

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