Question 1

The yield to maturity takes into account the relationship among a bond's maturity value and

Accepted Answer

A) the time to maturity. 
B) the current price. 
C) the dollar amount of interest. 
D) the corporate rate 
E) the time to maturity, the current price, the dollar amount of interest, and the corporate rate. 
A) the time to maturity. 
B) the current price. 
C) the dollar amount of interest. 
D) the corporate rate 
E) the time to maturity, the current price, the dollar amount of interest, and the corporate rate.

Question 2

The type of bond that is not registered in the investor's name is a ___________ bond.

Accepted Answer

A) revenue 
B) general obligation 
C) tax-exempt 
D) zero-coupon 
E) bearer 
A) revenue 
B) general obligation 
C) tax-exempt 
D) zero-coupon 
E) bearer

Question 3

Which of the following statements is true?

Accepted Answer

A) Convertible corporate bonds are more secure than government bonds. 
B) Convertible bonds often pay 1 to 2 percent more interest than nonconvertible bonds. 
C) Because of the conversion feature, it is not necessary to evaluate convertible, corporate bonds. 
D) In reality, there is no guarantee that bondholders will convert to common stock even if the market value of the common stock does increase in value. 
E) Even if convertible bondholders convert their investment to common stock, the bondholders still receive interest payments. 
A) Convertible corporate bonds are more secure than government bonds. 
B) Convertible bonds often pay 1 to 2 percent more interest than nonconvertible bonds. 
C) Because of the conversion feature, it is not necessary to evaluate convertible, corporate bonds. 
D) In reality, there is no guarantee that bondholders will convert to common stock even if the market value of the common stock does increase in value. 
E) Even if convertible bondholders convert their investment to common stock, the bondholders still receive interest payments.

Question 4

The only way an investor can make money on a bond investment is to hold the bond until maturity.

Accepted Answer

A) True 
 B)False

Question 5

The method used to pay bondholders their interest is the same regardless the type of bond.

Accepted Answer

A) True 
 B)False

Question 6

If a bond is purchased at a price above 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 7

A 'muni' is a municipal serial bond that partially matures every year for its term.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

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

Question 9

Although there is a great deal of information on the Internet about stock investments, it is impossible to evaluate bonds using the Internet.

Accepted Answer

A) True 
 B)False

Question 10

A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n) ____________ fund.

Accepted Answer

A) serial 
B) money 
C) debenture 
D) indenture 
E) sinking 
A) serial 
B) money 
C) debenture 
D) indenture 
E) sinking

Question 11

A convertible bond is a bond that can be exchanged, at the owner's option, for a specified number of shares of the corporation's common stock.

Accepted Answer

A) True 
 B)False

Question 12

The dollar amount repaid at maturity on a bond is referred to as its __________________.

Accepted Answer

A) Face value 
B) market value 
C) coupon payment 
D) capital gain 
E) future value 
A) Face value 
B) market value 
C) coupon payment 
D) capital gain 
E) future value

Question 13

When a bond is selling for less than its face value, it is said to be selling at a:

Accepted Answer

A) discount. 
B) premium. 
C) commission. 
D) conservative value. 
E) prospectus value. 
A) discount. 
B) premium. 
C) commission. 
D) conservative value. 
E) prospectus value.

Question 14

Based on the Dominion Bond Rating Service a bond with a rating of AA 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 15

What is the current yield for a $1,000 corporate bond that pays 7 percent and has a current market value of $975?

Accepted Answer

A) 7 percent 
B) 7.18 percent 
C) 8.33 percent 
D) 9 percent 
E) 10 percent 
A) 7 percent 
B) 7.18 percent 
C) 8.33 percent 
D) 9 percent 
E) 10 percent

The yield to maturity takes into account the relationship among a bond's maturity value and

The type of bond that is not registered in the investor's name is a ___________ bond.

Which of the following statements is true?

The only way an investor can make money on a bond investment is to hold the bond until maturity.

The method used to pay bondholders their interest is the same regardless the type of bond.

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

A 'muni' is a municipal serial bond that partially matures every year for its term.

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

Although there is a great deal of information on the Internet about stock investments, it is impossible to evaluate bonds using the Internet.

A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n) ____________ fund.

A convertible bond is a bond that can be exchanged, at the owner's option, for a specified number of shares of the corporation's common stock.

The dollar amount repaid at maturity on a bond is referred to as its __________________.

When a bond is selling for less than its face value, it is said to be selling at a:

Based on the Dominion Bond Rating Service a bond with a rating of AA 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 $975?

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

The yield to maturity takes into account the relationship among a bond's maturity value and

The type of bond that is not registered in the investor's name is a ___________ bond.

Which of the following statements is true?

The only way an investor can make money on a bond investment is to hold the bond until maturity.

The method used to pay bondholders their interest is the same regardless the type of bond.

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

A 'muni' is a municipal serial bond that partially matures every year for its term.

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

Although there is a great deal of information on the Internet about stock investments, it is impossible to evaluate bonds using the Internet.

A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n) ____________ fund.

A convertible bond is a bond that can be exchanged, at the owner's option, for a specified number of shares of the corporation's common stock.

The dollar amount repaid at maturity on a bond is referred to as its __________________.

When a bond is selling for less than its face value, it is said to be selling at a:

Based on the Dominion Bond Rating Service a bond with a rating of AA 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 $975?

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