Question 1

Generally, Canadian government securities issued by the Treasury Department

Accepted Answer

A)  are not graded because they are risk-free. 
B)  receive the DBRS' AAA rating. 
C)  receive the Standard & Poor's AA rating. 
D)  receive the Treasury Department's "risk-free" rating. 
E)  are given the same rating by all the bond rating companies. 
A)  are not graded because they are risk-free. 
B)  receive the DBRS' AAA rating. 
C)  receive the Standard & Poor's AA rating. 
D)  receive the Treasury Department's "risk-free" rating. 
E)  are given the same rating by all the bond rating companies.

Question 2

What is the current yield for a $1,000 corporate bond that pays 7 percent and has a current market value of $975?

Accepted Answer

A)  7 percent 
B)  7.18 percent 
C)  8.33 percent 
D)  9 percent 
E)  10 percent 
A)  7 percent 
B)  7.18 percent 
C)  8.33 percent 
D)  9 percent 
E)  10 percent

Question 3

The interest rate for a $1,000 bond is 6 percent. If comparable bonds are paying 8 percent, what is the approximate market value for the 6 percent bond?

Accepted Answer

A)  $1,000 
B)  $800 
C)  $750 
D)  $600 
E)  $500 
A)  $1,000 
B)  $800 
C)  $750 
D)  $600 
E)  $500

Question 4

Sun Corporation wants to retire a $50 million bond issue before the maturity date. What is the typical call premium per bond that Sun Corporation must pay for the bonds to be called back?

Accepted Answer

A)  $100 
B)  $10 - $50 
C)  $20 - $75 
D)  $50 - $100 
E)  $1 - $10 
A)  $100 
B)  $10 - $50 
C)  $20 - $75 
D)  $50 - $100 
E)  $1 - $10

Question 5

Bonds of a single issue that mature on different dates are called ____________ bonds.

Accepted Answer

A)  debenture 
B)  mortgage 
C)  sinking fund 
D)  subordinate 
E)  serial 
A)  debenture 
B)  mortgage 
C)  sinking fund 
D)  subordinate 
E)  serial

Question 6

Which ranks bonds from lowest to highest risk?

Accepted Answer

A)  Federal marketable bonds, corporate bonds, provincial bonds 
B)  Canada savings bonds, municipal bonds, provincial bonds 
C)  Canada savings bonds, provincial bonds, federal marketable bonds 
D)  Provincial bonds, municipal bonds, corporate bonds 
E)  Provincial bonds, Canada saving bonds, corporate bonds 
A)  Federal marketable bonds, corporate bonds, provincial bonds 
B)  Canada savings bonds, municipal bonds, provincial bonds 
C)  Canada savings bonds, provincial bonds, federal marketable bonds 
D)  Provincial bonds, municipal bonds, corporate bonds 
E)  Provincial bonds, Canada saving bonds, corporate bonds

Question 7

Canada Savings Bonds are issued in $1,000 units with a maturity of more than 1 year, but not more than 10 years.

Accepted Answer

A) True 
 B)False

Question 8

The Canada Savings Bond Payroll Program does not allow you to save through regular payroll deductions.

Accepted Answer

A) True 
 B)False

Question 9

The financially independent firm or individual that acts as the bondholders' representative is the:

Accepted Answer

A)  chairman of the board. 
B)  president of the corporation. 
C)  debenture holder. 
D)  indenture holder. 
E)  trustee. 
A)  chairman of the board. 
B)  president of the corporation. 
C)  debenture holder. 
D)  indenture holder. 
E)  trustee.

Question 10

If overall interest rates in the economy decrease, 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.

Question 11

A warrant is an option that is detachable from the associated bond that gives the holder the right to purchase the firms common shares.

Accepted Answer

A) True 
 B)False

Question 12

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

A registered coupon bond is registered for principal only, not for interest.

Accepted Answer

A) True 
 B)False

Question 15

The price at which a dealer is willing to sell 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 16

For government bonds, the bid price is the price that a dealer is willing to pay for a government security.

Accepted Answer

A) True 
 B)False

Question 17

A 'muni' is a municipal serial bond that partially matures every year for its term.

Accepted Answer

A) True 
 B)False

Question 18

What is the annualized yield of a 200 days T-Bill with a purchase price of $940.00?

Accepted Answer

A)  20.0% 
B)  17.15% 
C)  9.40% 
D)  6.38% 
E)  11.90% 
A)  20.0% 
B)  17.15% 
C)  9.40% 
D)  6.38% 
E)  11.90%

Question 19

Assume that you purchase a $1,000 corporate bond that pays 5.5 percent interest. What is the amount of interest that you receive each year?

Accepted Answer

A)  $1,000 
B)  $1,055 
C)  $55 
D)  $550 
E)  $0 
A)  $1,000 
B)  $1,055 
C)  $55 
D)  $550 
E)  $0

Question 20

Canada Savings Bonds are available in denominations of $300, $500, $1,000, $5,000, and $10,000.

Accepted Answer

A) True 
 B)False

Generally, Canadian government securities issued by the Treasury Department

What is the current yield for a $1,000 corporate bond that pays 7 percent and has a current market value of $975?

The interest rate for a $1,000 bond is 6 percent. If comparable bonds are paying 8 percent, what is the approximate market value for the 6 percent bond?

Sun Corporation wants to retire a $50 million bond issue before the maturity date. What is the typical call premium per bond that Sun Corporation must pay for the bonds to be called back?

Bonds of a single issue that mature on different dates are called ____________ bonds.

Which ranks bonds from lowest to highest risk?

Canada Savings Bonds are issued in $1,000 units with a maturity of more than 1 year, but not more than 10 years.

The Canada Savings Bond Payroll Program does not allow you to save through regular payroll deductions.

The financially independent firm or individual that acts as the bondholders' representative is the:

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

A warrant is an option that is detachable from the associated bond that gives the holder the right to purchase the firms common shares.

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

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

A registered coupon bond is registered for principal only, not for interest.

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

For government bonds, the bid price is the price that a dealer is willing to pay for a government security.

A 'muni' is a municipal serial bond that partially matures every year for its term.

What is the annualized yield of a 200 days T-Bill with a purchase price of $940.00?

Assume that you purchase a $1,000 corporate bond that pays 5.5 percent interest. What is the amount of interest that you receive each year?

Canada Savings Bonds are available in denominations of $300, $500, $1,000, $5,000, and $10,000.

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

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Exam 12: Investing in Bonds

Generally, Canadian government securities issued by the Treasury Department

What is the current yield for a $1,000 corporate bond that pays 7 percent and has a current market value of $975?

The interest rate for a $1,000 bond is 6 percent. If comparable bonds are paying 8 percent, what is the approximate market value for the 6 percent bond?

Sun Corporation wants to retire a $50 million bond issue before the maturity date. What is the typical call premium per bond that Sun Corporation must pay for the bonds to be called back?

Bonds of a single issue that mature on different dates are called ____________ bonds.

Which ranks bonds from lowest to highest risk?

Canada Savings Bonds are issued in $1,000 units with a maturity of more than 1 year, but not more than 10 years.

The Canada Savings Bond Payroll Program does not allow you to save through regular payroll deductions.

The financially independent firm or individual that acts as the bondholders' representative is the:

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

A warrant is an option that is detachable from the associated bond that gives the holder the right to purchase the firms common shares.

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

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

A registered coupon bond is registered for principal only, not for interest.

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

For government bonds, the bid price is the price that a dealer is willing to pay for a government security.

A 'muni' is a municipal serial bond that partially matures every year for its term.

What is the annualized yield of a 200 days T-Bill with a purchase price of $940.00?

Assume that you purchase a $1,000 corporate bond that pays 5.5 percent interest. What is the amount of interest that you receive each year?

Canada Savings Bonds are available in denominations of $300, $500, $1,000, $5,000, and $10,000.

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