Question 1

_____are bonds of a single issue that mature on different dates.

Accepted Answer

A) convertible bonds 
B) high-yield bonds 
C) mortgage bonds 
D) serial bonds 
E) debenture bonds 
A) convertible bonds 
B) high-yield bonds 
C) mortgage bonds 
D) serial bonds 
E) debenture bonds

Question 2

The commissions for purchasing bonds:

Accepted Answer

A) are stated in plain language as with stocks. 
B) are a stated dollar amount for each bond you buy. 
C) may be a combination of a stated dollar amount plus an additional commission. 
D) include a markdown when buying. 
E) None of these. 
A) are stated in plain language as with stocks. 
B) are a stated dollar amount for each bond you buy. 
C) may be a combination of a stated dollar amount plus an additional commission. 
D) include a markdown when buying. 
E) None of these.

Question 3

Interest rates on high-yield (junk)bonds are _____ percentage points higher than safer bond issues.

Accepted Answer

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

Question 4

Usually,interest on corporate bonds is paid to the bondholder 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 5

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

Accepted Answer

A) professional advisory services 
B) Corporation's website 
C) phone call to Corporation 
D) Written request mailed to the Corporation 
E) All of these sources can be used by an investor to obtain an annual report. 
A) professional advisory services 
B) Corporation's website 
C) phone call to Corporation 
D) Written request mailed to the Corporation 
E) All of these sources can be used by an investor to obtain an annual report.

Question 6

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

Accepted Answer

A) Debenture bond 
B) Subordinated debenture bond 
C) Convertible bond 
D) Callable bond 
E) High-yield bond 
A) Debenture bond 
B) Subordinated debenture bond 
C) Convertible bond 
D) Callable bond 
E) High-yield bond

Question 7

Interest checks for registered bonds are generally mailed directly to the bondholder of record.

Accepted Answer

A) True 
 B)False

Question 8

Elizabeth Cherry has a bond that has 10 years to maturity,a face value of $1,000,an 8% interest rate,and a market price of $1,200.What is the dollar amount of annual interest on this bond?

Accepted Answer

A) $20 
B) $80 
C) $100 
D) $120 
E) $200 
A) $20 
B) $80 
C) $100 
D) $120 
E) $200

Question 9

What is bond laddering?

Accepted Answer

A) Buying only long-term bonds 
B) Buying only short-term bonds 
C) Buying bonds with maturity dates spread out over a number of years 
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 maturity dates spread out over a number of years 
D) Combining stock and bond investments 
E) Exchanging bonds for shares of stock

Question 10

With the use of technology and computers,the book entry form of bond ownership is no longer used.

Accepted Answer

A) True 
 B)False

Question 11

In the U.S.,the _____ for a bond represents the price of the bond plus accrued interest earned since the last interest payment date.

Accepted Answer

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

Question 12

A legal debt convertible to shares of common stock at the investor's option is called a ____________.

Accepted Answer

A) debenture bond 
B) mortgage bond 
C) indenture note 
D) convertible corporate note 
E) convertible bond 
A) debenture bond 
B) mortgage bond 
C) indenture note 
D) convertible corporate note 
E) convertible bond

Question 13

Nancy Groom owns a $1,000 corporate bond that pays 8.5 percent.What is the amount of each semiannual 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 14

You own a $1,000 bond that pays 9.25 percent interest.What is the amount of interest you will receive each six months?

Accepted Answer

A) $4.62 
B) $9.25 
C) $92.50 
D) $46.25 
E) $23.13 
A) $4.62 
B) $9.25 
C) $92.50 
D) $46.25 
E) $23.13

Question 15

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

Accepted Answer

An investor can actually lose money by s

Question 16

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 17

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 to be repaid. 
D) Corporate bonds are a form of equity financing. 
E) Long-term corporate bonds have maturities over 10 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 to be repaid. 
D) Corporate bonds are a form of equity financing. 
E) Long-term corporate bonds have maturities over 10 years.

Question 18

Scott Turner has a bond with 10 years to maturity,a face value of $1,000,annual interest of $80,and a market price of $800.What is the yield-to-maturity on this bond?

Accepted Answer

A) 4.00 percent 
B) 6.67 percent 
C) 8.00 percent 
D) 10.00 percent 
E) 11.11 percent 
A) 4.00 percent 
B) 6.67 percent 
C) 8.00 percent 
D) 10.00 percent 
E) 11.11 percent

Question 19

Treasury bills:

Accepted Answer

A) are rated by Moody's. 
B) pay interest every six months. 
C) are long-term securities issued by the federal government. 
D) are discounted securities. 
E) pay a higher interest rate than corporate bonds. 
A) are rated by Moody's. 
B) pay interest every six months. 
C) are long-term securities issued by the federal government. 
D) are discounted securities. 
E) pay a higher interest rate than corporate bonds.

Question 20

The Treasury Department currently sells T-bills with _____maturities.

Accepted Answer

A) 4-week 
B) 13-week 
C) 26-week 
D) 52-week 
E) All of these 
A) 4-week 
B) 13-week 
C) 26-week 
D) 52-week 
E) All of these

_____are bonds of a single issue that mature on different dates.

The commissions for purchasing bonds:

Interest rates on high-yield (junk)bonds are _____ percentage points higher than safer bond issues.

Usually,interest on corporate bonds is paid to the bondholder every:

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

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

Interest checks for registered bonds are generally mailed directly to the bondholder of record.

Elizabeth Cherry has a bond that has 10 years to maturity,a face value of $1,000,an 8% interest rate,and a market price of $1,200.What is the dollar amount of annual interest on this bond?

What is bond laddering?

With the use of technology and computers,the book entry form of bond ownership is no longer used.

In the U.S.,the _____ for a bond represents the price of the bond plus accrued interest earned since the last interest payment date.

A legal debt convertible to shares of common stock at the investor's option is called a ____________.

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

You own a $1,000 bond that pays 9.25 percent interest.What is the amount of interest you will receive each six months?

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

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

Which one of the following statements is true?

Scott Turner has a bond with 10 years to maturity,a face value of $1,000,annual interest of $80,and a market price of $800.What is the yield-to-maturity on this bond?

Treasury bills:

The Treasury Department currently sells T-bills with _____maturities.

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

_____are bonds of a single issue that mature on different dates.

The commissions for purchasing bonds:

Interest rates on high-yield (junk)bonds are _____ percentage points higher than safer bond issues.

Usually,interest on corporate bonds is paid to the bondholder every:

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

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

Interest checks for registered bonds are generally mailed directly to the bondholder of record.

Elizabeth Cherry has a bond that has 10 years to maturity,a face value of $1,000,an 8% interest rate,and a market price of $1,200.What is the dollar amount of annual interest on this bond?

What is bond laddering?

With the use of technology and computers,the book entry form of bond ownership is no longer used.

In the U.S.,the _____ for a bond represents the price of the bond plus accrued interest earned since the last interest payment date.

A legal debt convertible to shares of common stock at the investor's option is called a ____________.

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

You own a $1,000 bond that pays 9.25 percent interest.What is the amount of interest you will receive each six months?

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

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

Which one of the following statements is true?

Scott Turner has a bond with 10 years to maturity,a face value of $1,000,annual interest of $80,and a market price of $800.What is the yield-to-maturity on this bond?

Treasury bills:

The Treasury Department currently sells T-bills with _____maturities.

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