Exam 15: Investing in Bonds

John Peterson purchased a bond that is priced far below its face value, that makes no interest payments, and that will be redeemed at its face value at maturity. In all likelihood, he purchased a(n) ____________ bond.

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

Tom McCallister buys a bond that the company can retire before maturity if they wish. What type of bond has Tom purchased?

Treasury bills:

Which bond rating does Standard & Poor's assign to a bond that is in default?

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

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

The yield to maturity takes into account the relationship between all of the following factors, except:

Generally, U.S. government securities issued by the Treasury Department:

A bond that is repaid from the income generated by the project it is designed to finance is called a(n):

Which of the following sources can be used by an investor to obtain a corporation's annual report?

Treasury notes are issued in $100 units with a maturity of more than 1 year, but not more than 10 years.

Which one of the following statements is true?

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.

A type of bond that is generally issued by corporations in foreign countries, but is no longer issued by U.S. corporations is called a:

What is the current yield for a $1,000 corporate bond that pays 7.5 percent and has a current market value of $950?

A bond that can be exchanged, at the owner's option, for a specified number of shares of the corporation's stock is called a(n) ____________ bond.

Insured municipal bonds offer slightly lower interest rates than uninsured bonds because of the reduced risk of default.

Investors purchase corporate bonds for:

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