Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The current yield for a bond is determined by dividing the annual income amount by which of the following:

Accepted Answer

A)  face value. 
B)  number of periods. 
C)  dollar amount of annual interest. 
D)  current market value. 
E)  tax rate. 
A)  face value. 
B)  number of periods. 
C)  dollar amount of annual interest. 
D)  current market value. 
E)  tax rate.

Question 3

You are a taxpayer in the 28 percent tax bracket and you own a tax-exempt bond that pays 5 percent. What is your taxable equivalent yield?

Accepted Answer

A)  5.00 percent 
B)  6.00 percent 
C)  6.94 percent 
D)  7.20 percent 
E)  14.40 percent 
A)  5.00 percent 
B)  6.00 percent 
C)  6.94 percent 
D)  7.20 percent 
E)  14.40 percent

Question 4

A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest.

Accepted Answer

A) True 
 B)False

Question 5

Bonds are generally considered a relatively safe investment. How is it possible to lose money on bonds?

Accepted Answer

The answer of Bonds are generally considered a relatively safe...

Question 6

Because of higher interest rates, zero-coupon bonds are sold at a premium price above the face value that will be paid at maturity.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  Revenue 
B)  General obligation 
C)  Bearer 
D)  Zero-coupon 
E)  Tax-exempt 
A)  Revenue 
B)  General obligation 
C)  Bearer 
D)  Zero-coupon 
E)  Tax-exempt

Question 8

A bond that is listed 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 9

Dave Harris purchased a single bond last year for $987. He knows he will receive $1,000 on March 1, 2026. This date is referred to as the ____ date.

Accepted Answer

A)  maturity 
B)  purchase 
C)  record 
D)  ex-dividend 
E)  declaration 
A)  maturity 
B)  purchase 
C)  record 
D)  ex-dividend 
E)  declaration

Question 10

A bond backed by the full faith, credit, and unlimited taxing power of the municipality that issued it is called a ____________ bond.

Accepted Answer

A)  debenture 
B)  mortgage 
C)  secured 
D)  general obligation 
E)  revenue 
A)  debenture 
B)  mortgage 
C)  secured 
D)  general obligation 
E)  revenue

Question 11

Which of the following assets owned by a company can be used to secure a mortgage bond?

Accepted Answer

A)  Real estate 
B)  Bonds 
C)  Stocks 
D)  Operating equipment 
E)  All of these owned assets can be used to secure a mortgage bond. 
A)  Real estate 
B)  Bonds 
C)  Stocks 
D)  Operating equipment 
E)  All of these owned assets can be used to secure a mortgage bond.

Question 12

You are trying to evaluate two bond issues. One bond issue is rated "A" by Moody's; the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback, would you purchase the "A" bond or the "B" bond?

Accepted Answer

The answer of You are trying to evaluate two bond...

Question 13

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 14

Bond interest is typically paid:

Accepted Answer

A)  monthly. 
B)  at the time of purchase. 
C)  annually. 
D)  semiannually. 
E)  quarterly. 
A)  monthly. 
B)  at the time of purchase. 
C)  annually. 
D)  semiannually. 
E)  quarterly.

Question 15

Which of the following can cause a bond investor to lose money?

Accepted Answer

A)  Selling a bond prior to maturity and at a time when the market interest rate exceeds the bond's interest rate 
B)  Converting a bond into shares of common stock that have a lesser combined value and immediately selling those shares 
C)  By the issuer going out of business when there are insufficient assets to pay the bondholders 
D)  By the issuer defaulting 
E)  All of these circumstances can cause a bond investor to lose money. 
A)  Selling a bond prior to maturity and at a time when the market interest rate exceeds the bond's interest rate 
B)  Converting a bond into shares of common stock that have a lesser combined value and immediately selling those shares 
C)  By the issuer going out of business when there are insufficient assets to pay the bondholders 
D)  By the issuer defaulting 
E)  All of these circumstances can cause a bond investor to lose money.

Question 16

For Moody's and Standard & Poor's, the first four individual bond-rating categories represent investment-grade securities.

Accepted Answer

A) True 
 B)False

Question 17

A corporate bond that is secured by various assets of the issuing firm 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 18

If a bond is quoted in the newspaper at 88.75, the current price of a $1,000 face value bond is:

Accepted Answer

A)  $75.00. 
B)  $88.00. 
C)  $88.75. 
D)  $887.50. 
E)  $1,000.00. 
A)  $75.00. 
B)  $88.00. 
C)  $88.75. 
D)  $887.50. 
E)  $1,000.00.

Question 19

Which one of the following statements is correct?

Accepted Answer

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

Question 20

For Moody's and Standard & Poor's, the first _____ individual bond-rating categories represent investment-grade securities.

Accepted Answer

A)  two 
B)  three 
C)  four 
D)  five 
E)  six 
A)  two 
B)  three 
C)  four 
D)  five 
E)  six

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

The current yield for a bond is determined by dividing the annual income amount by which of the following:

You are a taxpayer in the 28 percent tax bracket and you own a tax-exempt bond that pays 5 percent. What is your taxable equivalent yield?

A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest.

Bonds are generally considered a relatively safe investment. How is it possible to lose money on bonds?

Because of higher interest rates, zero-coupon bonds are sold at a premium price above the face value that will be paid at maturity.

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

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

Dave Harris purchased a single bond last year for $987. He knows he will receive $1,000 on March 1, 2026. This date is referred to as the ____ date.

A bond backed by the full faith, credit, and unlimited taxing power of the municipality that issued it is called a ____________ bond.

Which of the following assets owned by a company can be used to secure a mortgage bond?

You are trying to evaluate two bond issues. One bond issue is rated "A" by Moody's; the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback, would you purchase the "A" bond or the "B" bond?

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

Bond interest is typically paid:

Which of the following can cause a bond investor to lose money?

For Moody's and Standard & Poor's, the first four individual bond-rating categories represent investment-grade securities.

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

If a bond is quoted in the newspaper at 88.75, the current price of a $1,000 face value bond is:

Which one of the following statements is correct?

For Moody's and Standard & Poor's, the first _____ individual bond-rating categories represent investment-grade securities.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters

Exam 15: Investing in Bonds

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

The current yield for a bond is determined by dividing the annual income amount by which of the following:

You are a taxpayer in the 28 percent tax bracket and you own a tax-exempt bond that pays 5 percent. What is your taxable equivalent yield?

A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest.

Bonds are generally considered a relatively safe investment. How is it possible to lose money on bonds?

Because of higher interest rates, zero-coupon bonds are sold at a premium price above the face value that will be paid at maturity.

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

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

Dave Harris purchased a single bond last year for $987. He knows he will receive $1,000 on March 1, 2026. This date is referred to as the ____ date.

A bond backed by the full faith, credit, and unlimited taxing power of the municipality that issued it is called a ____________ bond.

Which of the following assets owned by a company can be used to secure a mortgage bond?

You are trying to evaluate two bond issues. One bond issue is rated "A" by Moody's; the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback, would you purchase the "A" bond or the "B" bond?

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

Bond interest is typically paid:

Which of the following can cause a bond investor to lose money?

For Moody's and Standard & Poor's, the first four individual bond-rating categories represent investment-grade securities.

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

If a bond is quoted in the newspaper at 88.75, the current price of a $1,000 face value bond is:

Which one of the following statements is correct?

For Moody's and Standard & Poor's, the first _____ individual bond-rating categories represent investment-grade securities.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters