Question 1

If overall interest rates in the economy rise,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. B

Question 2

Which of the following factors is used to calculate the total return on the sale of a bond?

Accepted Answer

A) commission when bond was purchased 
B) interest earned on the bond 
C) cost of the bond when purchased 
D) dollar return when the bond was sold 
E) All of these 
A) commission when bond was purchased 
B) interest earned on the bond 
C) cost of the bond when purchased 
D) dollar return when the bond was sold 
E) All of these E

Question 3

The legal conditions for a corporate bond are described in the:

Accepted Answer

A) trustee contract. 
B) bondholder's covenant. 
C) corporate charter. 
D) bond indenture. 
E) bond debenture. 
A) trustee contract. 
B) bondholder's covenant. 
C) corporate charter. 
D) bond indenture. 
E) bond debenture. D

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds?

Accepted Answer

A) Serial 
B) Default 
C) Sinking fund 
D) Low-coupon 
E) Convertible 
A) Serial 
B) Default 
C) Sinking fund 
D) Low-coupon 
E) Convertible

Question 7

For both Moody's and Standard & Poor's,the first two categories (high-grade and medium-grade)represent investment-grade securities.

Accepted Answer

A) True 
 B)False

Question 8

For government bonds,the difference between the bid price and the ask price is called the:

Accepted Answer

A) dirty price. 
B) asked price. 
C) spread. 
D) clean price. 
E) quoted price. 
A) dirty price. 
B) asked price. 
C) spread. 
D) clean price. 
E) quoted price.

Question 9

Which one of the following is issued by state and local governments?

Accepted Answer

A) Treasury bond 
B) Treasury bill 
C) Municipal bond 
D) Corporate bond 
E) Common stock 
A) Treasury bond 
B) Treasury bill 
C) Municipal bond 
D) Corporate bond 
E) Common stock

Question 10

Which is true of convertible bonds?

Accepted Answer

A) They pay both interest and dividends simultaneously. 
B) They pay no interest payments. 
C) They can be repurchased by the issuer before the maturity date. 
D) Not all convertible bonds are quality investments. 
E) They are secured by the FDIC. 
A) They pay both interest and dividends simultaneously. 
B) They pay no interest payments. 
C) They can be repurchased by the issuer before the maturity date. 
D) Not all convertible bonds are quality investments. 
E) They are secured by the FDIC.

Question 11

Which type of bond would provide a high degree of price stability,because the bonds are not very sensitive to changing interest rates?

Accepted Answer

A) Discount 
B) Short-term 
C) Long-term 
D) Speculative 
E) registered 
A) Discount 
B) Short-term 
C) Long-term 
D) Speculative 
E) registered

Question 12

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

Accepted Answer

A) registered bond. 
B) bearer bond. 
C) registered coupon bond. 
D) serial bond. 
E) mortgage bond. 
A) registered bond. 
B) bearer bond. 
C) registered coupon bond. 
D) serial bond. 
E) mortgage bond.

Question 13

The highest bond rating issued by Moody's is:

Accepted Answer

A) AAA. 
B) Aaa. 
C) A+. 
D) BB. 
E) AA. 
A) AAA. 
B) Aaa. 
C) A+. 
D) BB. 
E) AA.

Question 14

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

Accepted Answer

A) Dividends 
B) Bond indentures 
C) Liabilities 
D) Interest payments 
E) Assets 
A) Dividends 
B) Bond indentures 
C) Liabilities 
D) Interest payments 
E) Assets

Question 15

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 16

June Tavia is trying to calculate the taxable equivalent yield for a municipal bond.If the bond she owns pays 4.5 percent interest and she is in the 25 percent tax bracket,what is the taxable-equivalent yield?

Accepted Answer

A) 4.50 percent 
B) 5.50 percent 
C) 6.00 percent 
D) 7.72 percent 
E) 6.93 percent 
A) 4.50 percent 
B) 5.50 percent 
C) 6.00 percent 
D) 7.72 percent 
E) 6.93 percent

Question 17

Many financial experts recommend bond funds for very large investors,because these investments offer diversification and professional management.

Accepted Answer

A) True 
 B)False

Question 18

When investing in bonds,there are a lot of factors to consider.To help you decide if a bond is a good investment that will help you reach your financial goals,list 4 steps you can take.

Accepted Answer

1.Determine what type of bond you want.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

What is the difference between a U.S.government Treasury bill,Treasury note,and Treasury bond?

Accepted Answer

sometimes called T-bills,are issued in m

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

Which of the following factors is used to calculate the total return on the sale of a bond?

The legal conditions for a corporate bond are described in the:

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

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.

Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds?

For both Moody's and Standard & Poor's,the first two categories (high-grade and medium-grade)represent investment-grade securities.

For government bonds,the difference between the bid price and the ask price is called the:

Which one of the following is issued by state and local governments?

Which is true of convertible bonds?

Which type of bond would provide a high degree of price stability,because the bonds are not very sensitive to changing interest rates?

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

The highest bond rating issued by Moody's is:

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

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

June Tavia is trying to calculate the taxable equivalent yield for a municipal bond.If the bond she owns pays 4.5 percent interest and she is in the 25 percent tax bracket,what is the taxable-equivalent yield?

Many financial experts recommend bond funds for very large investors,because these investments offer diversification and professional management.

When investing in bonds,there are a lot of factors to consider.To help you decide if a bond is a good investment that will help you reach your financial goals,list 4 steps you can take.

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

What is the difference between a U.S.government Treasury bill,Treasury note,and Treasury bond?

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 Stock

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

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

Which of the following factors is used to calculate the total return on the sale of a bond?

The legal conditions for a corporate bond are described in the:

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

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.

Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds?

For both Moody's and Standard & Poor's,the first two categories (high-grade and medium-grade)represent investment-grade securities.

For government bonds,the difference between the bid price and the ask price is called the:

Which one of the following is issued by state and local governments?

Which is true of convertible bonds?

Which type of bond would provide a high degree of price stability,because the bonds are not very sensitive to changing interest rates?

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

The highest bond rating issued by Moody's is:

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

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

June Tavia is trying to calculate the taxable equivalent yield for a municipal bond.If the bond she owns pays 4.5 percent interest and she is in the 25 percent tax bracket,what is the taxable-equivalent yield?

Many financial experts recommend bond funds for very large investors,because these investments offer diversification and professional management.

When investing in bonds,there are a lot of factors to consider.To help you decide if a bond is a good investment that will help you reach your financial goals,list 4 steps you can take.

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

What is the difference between a U.S.government Treasury bill,Treasury note,and Treasury bond?

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 Stock

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters