Question 1

Based on the Dominion Bond Rating Service a bond with a rating of A has what type of credit?

Accepted Answer

A) Highest 
B) Superior 
C) Good 
D) Adequate 
E) Speculative 
A) Highest 
B) Superior 
C) Good 
D) Adequate 
E) Speculative C

Question 2

What financially independent firm acts as the bondholder's representative?

Accepted Answer

A) Auditor 
B) Lawyer 
C) Trustee 
D) Executor 
E) Law enforcement 
A) Auditor 
B) Lawyer 
C) Trustee 
D) Executor 
E) Law enforcement C

Question 3

Assume that you purchased a $1,000 Mobil Corporation bond that pays 8.25 percent interest.What is the amount of interest you would receive each six months?

Accepted Answer

A) $4.125 
B) $8.25 
C) $82.50 
D) $41.25 
E) $1,000 
A) $4.125 
B) $8.25 
C) $82.50 
D) $41.25 
E) $1,000 D

Question 4

A bond that is backed only by the reputation of the issuing corporation is called a(n) ____________ bond.

Accepted Answer

A) debenture 
B) mortgage 
C) indenture 
D) preemptive 
E) treasury 
A) debenture 
B) mortgage 
C) indenture 
D) preemptive 
E) treasury

Question 5

Based on the Dominion Bond Rating Service a bond with a rating of BB has what type of credit?

Accepted Answer

A) Highest 
B) Superior 
C) Good 
D) Adequate 
E) Speculative 
A) Highest 
B) Superior 
C) Good 
D) Adequate 
E) Speculative

Question 6

What is the current yield for a $1,000 corporate bond that pays 7 percent and has a current market value of $800?

Accepted Answer

A) 7 percent 
B) 7.5 percent 
C) 8.00 percent 
D) 8.75 percent 
E) 10 percent 
A) 7 percent 
B) 7.5 percent 
C) 8.00 percent 
D) 8.75 percent 
E) 10 percent

Question 7

A bond that is in the owner's name by the issuing company is called a ____________ bond.

Accepted Answer

A) certified 
B) coupon 
C) registered 
D) zero-coupon 
E) general obligation 
A) certified 
B) coupon 
C) registered 
D) zero-coupon 
E) general obligation

Question 8

The bond indenture is a legal document that details all of the conditions relating to a bond issue.

Accepted Answer

A) True 
 B)False

Question 9

The yield on a 365 days T-Bill with a purchase price of $989.50 is 10.6%.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following differentiates a bond from a GIC? I.Only bonds are subject to price risk.
II)Only bonds can generate a capital gain.
III)Only bonds are marketable securities.

Accepted Answer

A) I and II, only 
B) II and III, only 
C) I and III only 
D) I, II and III 
E) I only 
A) I and II, only 
B) II and III, only 
C) I and III only 
D) I, II and III 
E) I only

Question 11

Phillip owns two (2) $1,000 corporate bonds issued by Exxon.The bond pays 5 percent.If interest is paid semiannually, what is the amount of the cheque that Phillip will receive at the end of each six-month period?

Accepted Answer

A) $5 
B) $10 
C) $50 
D) $100 
E) $1,000 
A) $5 
B) $10 
C) $50 
D) $100 
E) $1,000

Question 12

The interest rate for a $1,000 bond is 6 percent.If comparable bonds are paying 9 percent, what is the approximate market value for the 6 percent bond?

Accepted Answer

A) $1,000 
B) $900 
C) $750 
D) $667 
E) $500 
A) $1,000 
B) $900 
C) $750 
D) $667 
E) $500

Question 13

The sale of bonds can also improve a corporation's financial leverage.

Accepted Answer

A) True 
 B)False

Question 14

If a bond was quoted in the newspaper at 60, the price in dollars was:

Accepted Answer

A) $6.00 
B) $60 
C) $600 
D) $1,000 
E) $1,060 
A) $6.00 
B) $60 
C) $600 
D) $1,000 
E) $1,060

Question 15

What type of bond is not registered in the investor's name?

Accepted Answer

A) Mortgage 
B) Collateral 
C) Convertible 
D) Callable 
E) Bearer 
A) Mortgage 
B) Collateral 
C) Convertible 
D) Callable 
E) Bearer

Question 16

Although unpopular a few years back, more and more corporations are issuing bearer bonds.

Accepted Answer

A) True 
 B)False

Question 17

A bond with a price quotation of 100 sells for $100.

Accepted Answer

A) True 
 B)False

Question 18

The price at which a dealer is willing to buy a government security is known as the ____________ price.

Accepted Answer

A) bid 
B) asked 
C) contract 
D) government 
E) adjusted 
A) bid 
B) asked 
C) contract 
D) government 
E) adjusted

Question 19

Sun Corporation wants to retire a $50 million bond issue before the maturity date.What is the typical call premium per bond that Sun Corporation must pay for the bonds to be called back?

Accepted Answer

A) $100 
B) $10 - $50 
C) $20 - $75 
D) $50 - $100 
E) $1 - $10 
A) $100 
B) $10 - $50 
C) $20 - $75 
D) $50 - $100 
E) $1 - $10

Question 20

The financially independent firm or individual that acts as the bondholders' representative is the:

Accepted Answer

A) chairman of the board. 
B) president of the corporation. 
C) debenture holder. 
D) indenture holder. 
E) trustee. 
A) chairman of the board. 
B) president of the corporation. 
C) debenture holder. 
D) indenture holder. 
E) trustee.

Based on the Dominion Bond Rating Service a bond with a rating of A has what type of credit?

What financially independent firm acts as the bondholder's representative?

Assume that you purchased a $1,000 Mobil Corporation bond that pays 8.25 percent interest.What is the amount of interest you would receive each six months?

A bond that is backed only by the reputation of the issuing corporation is called a(n) ____________ bond.

Based on the Dominion Bond Rating Service a bond with a rating of BB has what type of credit?

What is the current yield for a $1,000 corporate bond that pays 7 percent and has a current market value of $800?

A bond that is in the owner's name by the issuing company is called a ____________ bond.

The bond indenture is a legal document that details all of the conditions relating to a bond issue.

The yield on a 365 days T-Bill with a purchase price of $989.50 is 10.6%.

Which of the following differentiates a bond from a GIC? I.Only bonds are subject to price risk. II)Only bonds can generate a capital gain. III)Only bonds are marketable securities.

Phillip owns two (2) $1,000 corporate bonds issued by Exxon.The bond pays 5 percent.If interest is paid semiannually, what is the amount of the cheque that Phillip will receive at the end of each six-month period?

The interest rate for a $1,000 bond is 6 percent.If comparable bonds are paying 9 percent, what is the approximate market value for the 6 percent bond?

The sale of bonds can also improve a corporation's financial leverage.

If a bond was quoted in the newspaper at 60, the price in dollars was:

What type of bond is not registered in the investor's name?

Although unpopular a few years back, more and more corporations are issuing bearer bonds.

A bond with a price quotation of 100 sells for $100.

The price at which a dealer is willing to buy a government security is known as the ____________ price.

Sun Corporation wants to retire a $50 million bond issue before the maturity date.What is the typical call premium per bond that Sun Corporation must pay for the bonds to be called back?

The financially independent firm or individual that acts as the bondholders' representative is the:

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 12: Investing in Bonds

Based on the Dominion Bond Rating Service a bond with a rating of A has what type of credit?

What financially independent firm acts as the bondholder's representative?

Assume that you purchased a $1,000 Mobil Corporation bond that pays 8.25 percent interest.What is the amount of interest you would receive each six months?

A bond that is backed only by the reputation of the issuing corporation is called a(n) ____________ bond.

Based on the Dominion Bond Rating Service a bond with a rating of BB has what type of credit?

What is the current yield for a $1,000 corporate bond that pays 7 percent and has a current market value of $800?

A bond that is in the owner's name by the issuing company is called a ____________ bond.

The bond indenture is a legal document that details all of the conditions relating to a bond issue.

The yield on a 365 days T-Bill with a purchase price of $989.50 is 10.6%.

Which of the following differentiates a bond from a GIC? I.Only bonds are subject to price risk. II)Only bonds can generate a capital gain. III)Only bonds are marketable securities.

Phillip owns two (2) $1,000 corporate bonds issued by Exxon.The bond pays 5 percent.If interest is paid semiannually, what is the amount of the cheque that Phillip will receive at the end of each six-month period?

The interest rate for a $1,000 bond is 6 percent.If comparable bonds are paying 9 percent, what is the approximate market value for the 6 percent bond?

The sale of bonds can also improve a corporation's financial leverage.

If a bond was quoted in the newspaper at 60, the price in dollars was:

What type of bond is not registered in the investor's name?

Although unpopular a few years back, more and more corporations are issuing bearer bonds.

A bond with a price quotation of 100 sells for $100.

The price at which a dealer is willing to buy a government security is known as the ____________ price.

Sun Corporation wants to retire a $50 million bond issue before the maturity date.What is the typical call premium per bond that Sun Corporation must pay for the bonds to be called back?

The financially independent firm or individual that acts as the bondholders' representative is the:

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters