Question 1

Treasury bills are issued a minimum unit of $1,000 with additional increments of $1,000 above the minimum with terms to maturity of 91, 186, or 364 days

Accepted Answer

A) True 
 B)False  True

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

If a bond was quoted in the newspaper at 75, the price in dollars was:

Accepted Answer

A)  $7.50 
B)  $75 
C)  $750 
D)  $1,000 
E)  $1,075 
A)  $7.50 
B)  $75 
C)  $750 
D)  $1,000 
E)  $1,075 C

Question 4

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

Accepted Answer

A)  the time to maturity. 
B)  the current price. 
C)  the dollar amount of interest. 
D)  the corporate rate 
E)  the time to maturity, the current price, the dollar amount of interest, and the corporate rate. 
A)  the time to maturity. 
B)  the current price. 
C)  the dollar amount of interest. 
D)  the corporate rate 
E)  the time to maturity, the current price, the dollar amount of interest, and the corporate rate.

Question 5

A bond that is unsecured is called a(n)

Accepted Answer

A)  treasury bond. 
B)  savings bond. 
C)  junk bond. 
D)  debenture. 
E)  debt bond. 
A)  treasury bond. 
B)  savings bond. 
C)  junk bond. 
D)  debenture. 
E)  debt bond.

Question 6

The yield to maturity takes into account both interest income from the purchase date until the maturity date and the difference between the purchase price and the maturity value.

Accepted Answer

A) True 
 B)False

Question 7

Treasury bills are issued in $5,000 units with 10-year maturities.

Accepted Answer

A) True 
 B)False

Question 8

A bond that is backed only by the reputation of the issuing corporation 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 9

Treasury bills are:

Accepted Answer

A)  discounted securities sold by the government of Canada 
B)  discounted securities sold by corporations 
C)  regular interest bonds 
D)  compound interest bonds 
E)  simple-interest bonds 
A)  discounted securities sold by the government of Canada 
B)  discounted securities sold by corporations 
C)  regular interest bonds 
D)  compound interest bonds 
E)  simple-interest bonds

Question 10

If a bond was quoted in the newspaper at 60, the price in dollars was:

Accepted Answer

A)  $6.00 
B)  $60 
C)  $600 
D)  $1,000 
E)  $1,060 
A)  $6.00 
B)  $60 
C)  $600 
D)  $1,000 
E)  $1,060

Question 11

Which of the following statements is false?

Accepted Answer

A)  Generally, it is impossible to evaluate bond investments by accessing a corporation's home page. 
B)  Price information about corporate bonds is available on the Internet. 
C)  Although it is possible to use the Internet to evaluate a corporate bond issue, it is impossible to buy or sell the bond issue. 
D)  There are fewer Web sites that provide information on bonds when compared to Web sites that provide information for stocks. 
E)  You can either write or telephone the corporation and request an annual report. 
A)  Generally, it is impossible to evaluate bond investments by accessing a corporation's home page. 
B)  Price information about corporate bonds is available on the Internet. 
C)  Although it is possible to use the Internet to evaluate a corporate bond issue, it is impossible to buy or sell the bond issue. 
D)  There are fewer Web sites that provide information on bonds when compared to Web sites that provide information for stocks. 
E)  You can either write or telephone the corporation and request an annual report.

Question 12

Sarah 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)  subordinated. 
C)  indenture 
D)  convertible 
E)  mortgage 
A)  debenture 
B)  subordinated. 
C)  indenture 
D)  convertible 
E)  mortgage

Question 13

The price at which a dealer is willing to buy a government security is known as the ____________ price.

Accepted Answer

A)  bid 
B)  asked 
C)  contract 
D)  government 
E)  adjusted 
A)  bid 
B)  asked 
C)  contract 
D)  government 
E)  adjusted

Question 14

Which of the following statements is false?

Accepted Answer

A)  The federal government sells bonds and securities to finance both the national debt and the government's ongoing activities. 
B)  Federal government securities carry a reduced risk of default when compared to corporate securities. 
C)  Federal government treasury securities offer lower interest rates than corporate bonds. 
D)  Most individual investors that purchase treasury bills, notes, and bonds bid competitively. 
E)  Treasury securities may be purchased through banks or brokers. 
A)  The federal government sells bonds and securities to finance both the national debt and the government's ongoing activities. 
B)  Federal government securities carry a reduced risk of default when compared to corporate securities. 
C)  Federal government treasury securities offer lower interest rates than corporate bonds. 
D)  Most individual investors that purchase treasury bills, notes, and bonds bid competitively. 
E)  Treasury securities may be purchased through banks or brokers.

Question 15

The lowest bond rating issued by the DBRS is:

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
E)  Default. 
A)  A. 
B)  B. 
C)  C. 
D)  D. 
E)  Default.

Question 16

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

Accepted Answer

A)  decrease in value. 
B)  increase in value. 
C)  remain unchanged. 
D)  become worthless. 
E)  be returned to the corporation. 
A)  decrease in value. 
B)  increase in value. 
C)  remain unchanged. 
D)  become worthless. 
E)  be returned to the corporation.

Question 17

Which of the following statements is correct?

Accepted Answer

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

Question 18

A registered bond is registered for principal and for interest.

Accepted Answer

A) True 
 B)False

Question 19

A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.

Accepted Answer

A) True 
 B)False

Question 20

You are trying to evaluate two bond issues. One bond issue is rated "A" by the DBRS; the other is rated "B." How important are the bond ratings issued by the DBRS and CBRS? Based on your answer, would you purchase the "A" bond or the "B" bond?

Accepted Answer

To determine the quality and risk associ

Treasury bills are issued a minimum unit of $1,000 with additional increments of $1,000 above the minimum with terms to maturity of 91, 186, or 364 days

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

If a bond was quoted in the newspaper at 75, the price in dollars was:

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

A bond that is unsecured is called a(n)

The yield to maturity takes into account both interest income from the purchase date until the maturity date and the difference between the purchase price and the maturity value.

Treasury bills are issued in $5,000 units with 10-year maturities.

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

Treasury bills are:

If a bond was quoted in the newspaper at 60, the price in dollars was:

Which of the following statements is false?

Sarah 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.

The price at which a dealer is willing to buy a government security is known as the ____________ price.

Which of the following statements is false?

The lowest bond rating issued by the DBRS is:

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

Which of the following statements is correct?

A registered bond is registered for principal and for interest.

A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.

You are trying to evaluate two bond issues. One bond issue is rated "A" by the DBRS; the other is rated "B." How important are the bond ratings issued by the DBRS and CBRS? Based on your answer, would you purchase the "A" bond or the "B" bond?

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 12: Investing in Bonds

Treasury bills are issued a minimum unit of $1,000 with additional increments of $1,000 above the minimum with terms to maturity of 91, 186, or 364 days

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

If a bond was quoted in the newspaper at 75, the price in dollars was:

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

A bond that is unsecured is called a(n)

The yield to maturity takes into account both interest income from the purchase date until the maturity date and the difference between the purchase price and the maturity value.

Treasury bills are issued in $5,000 units with 10-year maturities.

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

Treasury bills are:

If a bond was quoted in the newspaper at 60, the price in dollars was:

Which of the following statements is false?

Sarah 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.

The price at which a dealer is willing to buy a government security is known as the ____________ price.

Which of the following statements is false?

The lowest bond rating issued by the DBRS is:

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

Which of the following statements is correct?

A registered bond is registered for principal and for interest.

A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.

You are trying to evaluate two bond issues. One bond issue is rated "A" by the DBRS; the other is rated "B." How important are the bond ratings issued by the DBRS and CBRS? Based on your answer, would you purchase the "A" bond or the "B" bond?

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters