Exam 16: Investing in Bonds

Which of the following tax effects could not occur with the purchase and sale of a corporate bond?

Which of the following is not a characteristic of corporate bonds?

Use the following two columns of items to answer the matching questions below: -face value

Use the following two columns of items to answer the matching questions below: -default risk

Which of the following is not always a true statement?

During their lifetime,bonds can be sold for more or less than their face value depending on the demand for these particular bonds.

As an investor,why should you consider investing in bonds?

A corporate bond with a rating below ________ is considered to be a junk bond?

As interest rates rise,the market price of your bond is also likely to rise.

Bonds with a ________ degree of default risk are most susceptible to default when economic conditions are ________.

Another name for the par value of a bond is its ________.

The return on bonds currently held will be more favorable if interest rates ________ over the period you hold the bonds.

Which of the following statements is not true regarding municipal bonds?

The ________ is the amount returned to the investor at the maturity date when the bond is due.

The ________ strategy is intended to generate periodic and stable interest income.

Which of the following issuers' bonds would be subject to both federal and state income taxes?

When you select bonds based on the expectation that interest rates will decline,you are using a(n)________ strategy.

Municipal bonds are those issued by the U.S.Treasury Department for the benefit of cities and states.

The coupon rate of interest on a bond is always stated as a(n)

Investors purchase corporate bonds because