Question 1

Treasury bills are issued in minimum units of $10,000 with maturities that range from 10 to 30 years.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Generally, Canadian government securities issued by the Treasury Department

Accepted Answer

A) are not graded because they are risk-free. 
B) receive the DBRS' AAA rating. 
C) receive the Standard & Poor's AA rating. 
D) receive the Treasury Department's "risk-free" rating. 
E) are given the same rating by all the bond rating companies. 
A) are not graded because they are risk-free. 
B) receive the DBRS' AAA rating. 
C) receive the Standard & Poor's AA rating. 
D) receive the Treasury Department's "risk-free" rating. 
E) are given the same rating by all the bond rating companies.

Question 4

What type of bond does not pay interest?

Accepted Answer

A) Zero coupon 
B) Collateral 
C) Convertible 
D) Callable 
E) Bearer 
A) Zero coupon 
B) Collateral 
C) Convertible 
D) Callable 
E) Bearer

Question 5

Maturity dates for corporate bonds generally range from 5 to 7 years.

Accepted Answer

A) True 
 B)False

Question 6

A corporate bond that is secured by various assets of the issuing firm is called a(n) ____________ bond.

Accepted Answer

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

Question 7

What is the approximate market value for a $1,000 corporate bond that pays 8 percent interest when comparable bonds are paying 9 percent interest?

Accepted Answer

A) $80 
B) $90 
C) $889 
D) $1,000 
E) $1,125 
A) $80 
B) $90 
C) $889 
D) $1,000 
E) $1,125

Question 8

Treasury bills are issued at

Accepted Answer

A) Par 
B) A premium 
C) A discount 
D) Face value 
E) Maturity value 
A) Par 
B) A premium 
C) A discount 
D) Face value 
E) Maturity value

Question 9

A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is correct?

Accepted Answer

A) Stock is a form of debt capital. 
B) Bonds are a form of debt capital. 
C) Stock must be repaid at maturity. 
D) Bonds do not have to be repaid at maturity. 
E) Interest payments to bondholders are at the discretion of the corporation. 
A) Stock is a form of debt capital. 
B) Bonds are a form of debt capital. 
C) Stock must be repaid at maturity. 
D) Bonds do not have to be repaid at maturity. 
E) Interest payments to bondholders are at the discretion of the corporation.

Question 11

In reality, there is no guarantee that convertible bondholders will convert to common stock even if the price of the common stock does increase.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true?

Accepted Answer

A) All local newspapers contain information on bond prices. 
B) In bond quotations, prices are given as a percentage of the bond's face value. 
C) The face value for most corporate bonds is $5,000. 
D) To find the market price of a corporate bond, you must contact the corporation that originally issued the bond. 
E) To find the market price of a corporate bond, you must call a stockbroker. 
A) All local newspapers contain information on bond prices. 
B) In bond quotations, prices are given as a percentage of the bond's face value. 
C) The face value for most corporate bonds is $5,000. 
D) To find the market price of a corporate bond, you must contact the corporation that originally issued the bond. 
E) To find the market price of a corporate bond, you must call a stockbroker.

Question 14

The interest rate for a $1,000 bond is 6 percent.If comparable bonds are paying 8 percent, what is the approximate market value for the 6 percent bond?

Accepted Answer

A) $1,000 
B) $800 
C) $750 
D) $600 
E) $500 
A) $1,000 
B) $800 
C) $750 
D) $600 
E) $500

Question 15

Which ranks bonds from lowest to highest risk?

Accepted Answer

A) Federal marketable bonds, corporate bonds, provincial bonds 
B) Canada savings bonds, municipal bonds, provincial bonds 
C) Canada savings bonds, provincial bonds, federal marketable bonds 
D) Provincial bonds, municipal bonds, corporate bonds 
E) Provincial bonds, Canada saving bonds, corporate bonds 
A) Federal marketable bonds, corporate bonds, provincial bonds 
B) Canada savings bonds, municipal bonds, provincial bonds 
C) Canada savings bonds, provincial bonds, federal marketable bonds 
D) Provincial bonds, municipal bonds, corporate bonds 
E) Provincial bonds, Canada saving bonds, corporate bonds

Question 16

Because bonds are considered debt financing that must be repaid at maturity, the corporation's financial stability has little effect on the bond's value between the issue date and the maturity date.

Accepted Answer

A) True 
 B)False

Question 17

Maturity dates for corporate bonds generally range from 1 to 30 years.

Accepted Answer

A) True 
 B)False

Question 18

Treasury bills are:

Accepted Answer

A) discounted securities sold by the government of Canada 
B) discounted securities sold by corporations 
C) regular interest bonds 
D) compound interest bonds 
E) simple-interest bonds 
A) discounted securities sold by the government of Canada 
B) discounted securities sold by corporations 
C) regular interest bonds 
D) compound interest bonds 
E) simple-interest bonds

Question 19

Investors purchase corporate bonds for

Accepted Answer

A) interest income. 
B) possible increase in value. 
C) repayment at maturity. 
D) interest income, possible increase in value, and repayment at maturity. 
E) secured promise to pay interest made by the issuing company. 
A) interest income. 
B) possible increase in value. 
C) repayment at maturity. 
D) interest income, possible increase in value, and repayment at maturity. 
E) secured promise to pay interest made by the issuing company.

Question 20

A bond issued with detachable coupons that the bondholder must present to a paying agent or the issuer in order to receive interest payments is called a __________ bond.

Accepted Answer

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

Treasury bills are issued in minimum units of $10,000 with maturities that range from 10 to 30 years.

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

Generally, Canadian government securities issued by the Treasury Department

What type of bond does not pay interest?

Maturity dates for corporate bonds generally range from 5 to 7 years.

A corporate bond that is secured by various assets of the issuing firm is called a(n) ____________ bond.

What is the approximate market value for a $1,000 corporate bond that pays 8 percent interest when comparable bonds are paying 9 percent interest?

Treasury bills are issued at

A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.

Which of the following statements is correct?

In reality, there is no guarantee that convertible bondholders will convert to common stock even if the price of the common stock does increase.

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

Which of the following statements is true?

The interest rate for a $1,000 bond is 6 percent.If comparable bonds are paying 8 percent, what is the approximate market value for the 6 percent bond?

Which ranks bonds from lowest to highest risk?

Because bonds are considered debt financing that must be repaid at maturity, the corporation's financial stability has little effect on the bond's value between the issue date and the maturity date.

Maturity dates for corporate bonds generally range from 1 to 30 years.

Treasury bills are:

Investors purchase corporate bonds for

A bond issued with detachable coupons that the bondholder must present to a paying agent or the issuer in order to receive interest payments is called a __________ bond.

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

Treasury bills are issued in minimum units of $10,000 with maturities that range from 10 to 30 years.

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

Generally, Canadian government securities issued by the Treasury Department

What type of bond does not pay interest?

Maturity dates for corporate bonds generally range from 5 to 7 years.

A corporate bond that is secured by various assets of the issuing firm is called a(n) ____________ bond.

What is the approximate market value for a $1,000 corporate bond that pays 8 percent interest when comparable bonds are paying 9 percent interest?

Treasury bills are issued at

A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.

Which of the following statements is correct?

In reality, there is no guarantee that convertible bondholders will convert to common stock even if the price of the common stock does increase.

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

Which of the following statements is true?

The interest rate for a $1,000 bond is 6 percent.If comparable bonds are paying 8 percent, what is the approximate market value for the 6 percent bond?

Which ranks bonds from lowest to highest risk?

Because bonds are considered debt financing that must be repaid at maturity, the corporation's financial stability has little effect on the bond's value between the issue date and the maturity date.

Maturity dates for corporate bonds generally range from 1 to 30 years.

Treasury bills are:

Investors purchase corporate bonds for

A bond issued with detachable coupons that the bondholder must present to a paying agent or the issuer in order to receive interest payments is called a __________ bond.

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