Question 1

A collateral trust bond is secured by a pledge of securities and is oft en issued by companies that do not own many fixed assets but do own other securities.

Accepted Answer

A) True 
 B)False

Question 2

A registered bond is registered for principal and for interest.

Accepted Answer

A) True 
 B)False

Question 3

Corporate bonds are a form of equity financing that does not have to be repaid.

Accepted Answer

A) True 
 B)False

Question 4

Investors who purchase subordinated debentures usually enjoy higher interest rates than other bondholders because of the increased risk associated with this type of bond.

Accepted Answer

A) True 
 B)False

Question 5

Treasury bills are issued a minimum unit of $1,000 with additional increments of $1,000 above the minimum with terms to maturity of 91, 186, or 364 days

Accepted Answer

A) True 
 B)False

Question 6

If overall interest rates in the economy rise, a corporate bond with a fixed interest rate will generally

Accepted Answer

A) decrease in value. 
B) increase in value. 
C) remain unchanged. 
D) become worthless. 
E) be returned to the corporation. 
A) decrease in value. 
B) increase in value. 
C) remain unchanged. 
D) become worthless. 
E) be returned to the corporation.

Question 7

Which of the following statements is false?

Accepted Answer

A) Generally, it is impossible to evaluate bond investments by accessing a corporation's home page. 
B) Price information about corporate bonds is available on the Internet. 
C) Although it is possible to use the Internet to evaluate a corporate bond issue, it is impossible to buy or sell the bond issue. 
D) There are fewer Web sites that provide information on bonds when compared to Web sites that provide information for stocks. 
E) You can either write or telephone the corporation and request an annual report. 
A) Generally, it is impossible to evaluate bond investments by accessing a corporation's home page. 
B) Price information about corporate bonds is available on the Internet. 
C) Although it is possible to use the Internet to evaluate a corporate bond issue, it is impossible to buy or sell the bond issue. 
D) There are fewer Web sites that provide information on bonds when compared to Web sites that provide information for stocks. 
E) You can either write or telephone the corporation and request an annual report.

Question 8

A registered coupon bond is registered for interest, but not for the principal amount.

Accepted Answer

A) True 
 B)False

Question 9

What is the annualized yield of a 200 days T-Bill with a purchase price of $940.00?

Accepted Answer

A) 20.0% 
B) 17.15% 
C) 9.40% 
D) 6.38% 
E) 11.90% 
A) 20.0% 
B) 17.15% 
C) 9.40% 
D) 6.38% 
E) 11.90%

Question 10

Which of the following statements is false?

Accepted Answer

A) The federal government sells bonds and securities to finance both the national debt and the government's ongoing activities. 
B) Federal government securities carry a reduced risk of default when compared to corporate securities. 
C) Federal government treasury securities offer lower interest rates than corporate bonds. 
D) Most individual investors that purchase treasury bills, notes, and bonds bid competitively. 
E) Treasury securities may be purchased through banks or brokers. 
A) The federal government sells bonds and securities to finance both the national debt and the government's ongoing activities. 
B) Federal government securities carry a reduced risk of default when compared to corporate securities. 
C) Federal government treasury securities offer lower interest rates than corporate bonds. 
D) Most individual investors that purchase treasury bills, notes, and bonds bid competitively. 
E) Treasury securities may be purchased through banks or brokers.

Question 11

A $l,000 corporate bond is convertible to 20 shares of the corporation's common stock.What is the minimum price that the stock must obtain before bondholders would consider converting a bond to the company's common stock?

Accepted Answer

A) $10 
B) $20 
C) $30 
D) $40 
E) $50 
A) $10 
B) $20 
C) $30 
D) $40 
E) $50

Question 12

If a bond is purchased at a price below the face value, the yield to maturity is:

Accepted Answer

A) greater than the stated interest rate. 
B) the same as the stated interest rate. 
C) less than the stated interest rate. 
D) zero. 
E) of no significance. 
A) greater than the stated interest rate. 
B) the same as the stated interest rate. 
C) less than the stated interest rate. 
D) zero. 
E) of no significance.

Question 13

A sinking fund is a fund to which deposits are made each year for the purpose of redeeming a bond issue.

Accepted Answer

A) True 
 B)False

Question 14

Bonds of a single issue that mature on different dates are called ____________ bonds.

Accepted Answer

A) debenture 
B) mortgage 
C) sinking fund 
D) subordinate 
E) serial 
A) debenture 
B) mortgage 
C) sinking fund 
D) subordinate 
E) serial

Question 15

Canada Savings Bonds are issued in $1,000 units with a maturity of more than 1 year, but not more than 10 years.

Accepted Answer

A) True 
 B)False

Question 16

A mortgage bond is a corporate bond secured by various assets of the firm.

Accepted Answer

A) True 
 B)False

Question 17

Based on the Dominion Bond Rating Service a bond with a rating of BBB 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 18

A call feature:

Accepted Answer

A) allows bondholders to convert their bond to a specified number of shares of common stock. 
B) is not available on corporate bonds. 
C) allows the corporation to buy outstanding bonds from current bondholders before the maturity date. 
D) is only available with government securities. 
E) is guaranteed by the corporation. 
A) allows bondholders to convert their bond to a specified number of shares of common stock. 
B) is not available on corporate bonds. 
C) allows the corporation to buy outstanding bonds from current bondholders before the maturity date. 
D) is only available with government securities. 
E) is guaranteed by the corporation.

Question 19

The highest bond rating issued by the Dominion Bond Rating Service (DBRS) is

Accepted Answer

A) AAA. 
B) Aaa. 
C) A+. 
D) BB. 
E) Excellent. 
A) AAA. 
B) Aaa. 
C) A+. 
D) BB. 
E) Excellent.

Question 20

If overall interest rates in the economy raise, then a corporate bond with a fixed interest rate will decrease in value.

Accepted Answer

A) True 
 B)False

A collateral trust bond is secured by a pledge of securities and is oft en issued by companies that do not own many fixed assets but do own other securities.

A registered bond is registered for principal and for interest.

Corporate bonds are a form of equity financing that does not have to be repaid.

Investors who purchase subordinated debentures usually enjoy higher interest rates than other bondholders because of the increased risk associated with this type of bond.

Treasury bills are issued a minimum unit of $1,000 with additional increments of $1,000 above the minimum with terms to maturity of 91, 186, or 364 days

If overall interest rates in the economy rise, a corporate bond with a fixed interest rate will generally

Which of the following statements is false?

A registered coupon bond is registered for interest, but not for the principal amount.

What is the annualized yield of a 200 days T-Bill with a purchase price of $940.00?

Which of the following statements is false?

A $l,000 corporate bond is convertible to 20 shares of the corporation's common stock.What is the minimum price that the stock must obtain before bondholders would consider converting a bond to the company's common stock?

If a bond is purchased at a price below the face value, the yield to maturity is:

A sinking fund is a fund to which deposits are made each year for the purpose of redeeming a bond issue.

Bonds of a single issue that mature on different dates are called ____________ bonds.

Canada Savings Bonds are issued in $1,000 units with a maturity of more than 1 year, but not more than 10 years.

A mortgage bond is a corporate bond secured by various assets of the firm.

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

A call feature:

The highest bond rating issued by the Dominion Bond Rating Service (DBRS) is

If overall interest rates in the economy raise, then a corporate bond with a fixed interest rate will decrease in value.

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

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Exam 12: Investing in Bonds

A collateral trust bond is secured by a pledge of securities and is oft en issued by companies that do not own many fixed assets but do own other securities.

A registered bond is registered for principal and for interest.

Corporate bonds are a form of equity financing that does not have to be repaid.

Investors who purchase subordinated debentures usually enjoy higher interest rates than other bondholders because of the increased risk associated with this type of bond.

Treasury bills are issued a minimum unit of $1,000 with additional increments of $1,000 above the minimum with terms to maturity of 91, 186, or 364 days

If overall interest rates in the economy rise, a corporate bond with a fixed interest rate will generally

Which of the following statements is false?

A registered coupon bond is registered for interest, but not for the principal amount.

What is the annualized yield of a 200 days T-Bill with a purchase price of $940.00?

Which of the following statements is false?

A $l,000 corporate bond is convertible to 20 shares of the corporation's common stock.What is the minimum price that the stock must obtain before bondholders would consider converting a bond to the company's common stock?

If a bond is purchased at a price below the face value, the yield to maturity is:

A sinking fund is a fund to which deposits are made each year for the purpose of redeeming a bond issue.

Bonds of a single issue that mature on different dates are called ____________ bonds.

Canada Savings Bonds are issued in $1,000 units with a maturity of more than 1 year, but not more than 10 years.

A mortgage bond is a corporate bond secured by various assets of the firm.

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

A call feature:

The highest bond rating issued by the Dominion Bond Rating Service (DBRS) is

If overall interest rates in the economy raise, then a corporate bond with a fixed interest rate will decrease in value.

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