Question 1

The quality rating given by Standard & Poor's to highly-speculative bonds is:

Accepted Answer

A)  high-grade. 
B)  default. 
C)  investment-grade. 
D)  medium-grade. 
E)  unrated. 
A)  high-grade. 
B)  default. 
C)  investment-grade. 
D)  medium-grade. 
E)  unrated.

Question 2

For 2013, bond yields for high-quality corporate bonds have been approximately how much?

Accepted Answer

A)  2% 
B)  4% 
C)  6% 
D)  8% 
E)  10% 
A)  2% 
B)  4% 
C)  6% 
D)  8% 
E)  10%

Question 3

Define five of these six terms.
(A) corporate bond (B) bond indenture (C) trustee (D) mortgage bond (E) debenture bond (F) convertible bond

Accepted Answer

Certainly! Here are definitions for five

Question 4

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 5

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 6

Which one of the following statements is true?

Accepted Answer

A)  Corporate bonds do not have a maturity date. 
B)  The maturity dates for corporate bonds are generally less than a year. 
C)  Corporate bonds do not have any default risk. 
D)  Corporate bonds are a form of equity. 
E)  Long-term corporate bonds have maturities over 15 years. 
A)  Corporate bonds do not have a maturity date. 
B)  The maturity dates for corporate bonds are generally less than a year. 
C)  Corporate bonds do not have any default risk. 
D)  Corporate bonds are a form of equity. 
E)  Long-term corporate bonds have maturities over 15 years.

Question 7

What is bond laddering?

Accepted Answer

A)  Buying only long-term bonds 
B)  Buying only short-term bonds 
C)  Buying bonds with staggered maturity dates 
D)  Combining stock and bond investments 
E)  Exchanging bonds for shares of stock 
A)  Buying only long-term bonds 
B)  Buying only short-term bonds 
C)  Buying bonds with staggered maturity dates 
D)  Combining stock and bond investments 
E)  Exchanging bonds for shares of stock

Question 8

Dave Harris has just purchased a bond with a face value of $1,000 that pays 6 percent. The purchase price of the bond was $900, and the bond will mature in 5 years. What is the yield to maturity for this bond?

Accepted Answer

A)  5.5 percent 
B)  6.0 percent 
C)  8.4 percent 
D)  9.0 percent 
E)  6.7 percent 
A)  5.5 percent 
B)  6.0 percent 
C)  8.4 percent 
D)  9.0 percent 
E)  6.7 percent

Question 9

Generally, interest on corporate bonds is paid every:

Accepted Answer

A)  month. 
B)  three months. 
C)  six months. 
D)  nine months. 
E)  year. 
A)  month. 
B)  three months. 
C)  six months. 
D)  nine months. 
E)  year.

Question 10

When investors purchase bonds that mature at regular intervals in order to balance risk and return, they are creating a:

Accepted Answer

A)  bond ladder. 
B)  staggered investment program. 
C)  incremental investment program. 
D)  step-up allocation program. 
E)  guaranteed investment program. 
A)  bond ladder. 
B)  staggered investment program. 
C)  incremental investment program. 
D)  step-up allocation program. 
E)  guaranteed investment program.

Question 11

Corporate and Treasury bonds generally produce more interest revenue than municipal bonds. Why do investors choose to buy municipal bonds?

Accepted Answer

The answer of Corporate and Treasury bonds generally produce more...

Question 12

Bond interest payments are a tax-deductible business expense.

Accepted Answer

A) True 
 B)False

Question 13

Although unpopular a few years back, more and more corporations are issuing bearer bonds.

Accepted Answer

A) True 
 B)False

Question 14

Nancy Groom owns a $1,000 corporate bond that pays 8.5 percent. What is the amount of each interest payment?

Accepted Answer

A)  $4.25 
B)  $42.50 
C)  $85.00 
D)  $850.00 
E)  $425.00 
A)  $4.25 
B)  $42.50 
C)  $85.00 
D)  $850.00 
E)  $425.00

Question 15

Sandra Peterson has been thinking about investing in corporate bonds. She is concerned about safety and wants the most secure bond investment possible. She would most likely invest in ____________ bonds.

Accepted Answer

A)  debenture 
B)  mortgage 
C)  speculative 
D)  convertible 
E)  subordinated 
A)  debenture 
B)  mortgage 
C)  speculative 
D)  convertible 
E)  subordinated

The quality rating given by Standard & Poor's to highly-speculative bonds is:

For 2013, bond yields for high-quality corporate bonds have been approximately how much?

Define five of these six terms. (A) corporate bond (B) bond indenture (C) trustee (D) mortgage bond (E) debenture bond (F) convertible bond

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

A call feature:

Which one of the following statements is true?

What is bond laddering?

Dave Harris has just purchased a bond with a face value of $1,000 that pays 6 percent. The purchase price of the bond was $900, and the bond will mature in 5 years. What is the yield to maturity for this bond?

Generally, interest on corporate bonds is paid every:

When investors purchase bonds that mature at regular intervals in order to balance risk and return, they are creating a:

Corporate and Treasury bonds generally produce more interest revenue than municipal bonds. Why do investors choose to buy municipal bonds?

Bond interest payments are a tax-deductible business expense.

Although unpopular a few years back, more and more corporations are issuing bearer bonds.

Nancy Groom owns a $1,000 corporate bond that pays 8.5 percent. What is the amount of each interest payment?

Sandra Peterson has been thinking about investing in corporate bonds. She is concerned about safety and wants the most secure bond investment possible. She would most likely invest in ____________ bonds.

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

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Exam 15: Investing in Bonds

The quality rating given by Standard & Poor's to highly-speculative bonds is:

For 2013, bond yields for high-quality corporate bonds have been approximately how much?

Define five of these six terms. (A) corporate bond (B) bond indenture (C) trustee (D) mortgage bond (E) debenture bond (F) convertible bond

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

A call feature:

Which one of the following statements is true?

What is bond laddering?

Dave Harris has just purchased a bond with a face value of $1,000 that pays 6 percent. The purchase price of the bond was $900, and the bond will mature in 5 years. What is the yield to maturity for this bond?

Generally, interest on corporate bonds is paid every:

When investors purchase bonds that mature at regular intervals in order to balance risk and return, they are creating a:

Corporate and Treasury bonds generally produce more interest revenue than municipal bonds. Why do investors choose to buy municipal bonds?

Bond interest payments are a tax-deductible business expense.

Although unpopular a few years back, more and more corporations are issuing bearer bonds.

Nancy Groom owns a $1,000 corporate bond that pays 8.5 percent. What is the amount of each interest payment?

Sandra Peterson has been thinking about investing in corporate bonds. She is concerned about safety and wants the most secure bond investment possible. She would most likely invest in ____________ bonds.

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