Question 1

In comparing municipal bonds to other taxable bonds,the comparison must be between equivalent taxable yields.

Accepted Answer

A) True 
 B)False  True

Question 2

Why are the tax implications of investing in bonds more involved than the tax implications of investing in common stock?

Accepted Answer

Common stock is pretty straight forward when it comes to paying taxes on their returns.With stock,you either have a capital gain or loss and possibly dividend income,both of which are obviously taxable sources of income.With the many different types of bonds,some are taxable bonds and,similar to stocks,you either have a capital gain or loss and interest income,all of which are obviously taxable.However,with U.S.Treasuries,their may be tax liabilities on certain sources of income,either capital gains or rate adjustments with TIPS.Municipal bonds are similar except it also depends on where you live and what State issued the bonds.There may not be a Federal tax liability but there may be different State tax liabilities.

Question 3

Collectibles such as baseball cards and beanie babies can be fun,but one should not expect them to provide for your financial future.

Accepted Answer

A) True 
 B)False  True

Question 4

When interest rates rise,bond values drop,and when interest rates drop,bond values rise.Using this inverse relationship,develop a two-part strategy for the bond investor.

Accepted Answer

When an investor expects inter

Question 5

The long-term bond you own was issued by IBM Corporation and used no collateral.This is an example of a(n)

Accepted Answer

A) unsecured mortgage. 
B) credit. 
C) debenture. 
D) nomenclature. 
E) none of the above. 
A) unsecured mortgage. 
B) credit. 
C) debenture. 
D) nomenclature. 
E) none of the above.

Question 6

According to the Morgan Stanley REIT Index,REITs fell by about ________ between March 2007 and March 2009.Then between March 2009 and March 2017,the Morgan Stanley REIT Index rose by more than two and a half times,but REITs were still down ________ from their 2007 high.

Accepted Answer

A) 15 percent;45 percent 
B) 50 percent;50 percent 
C) 75 percent;30 percent 
D) 95 percent;5 percent 
A) 15 percent;45 percent 
B) 50 percent;50 percent 
C) 75 percent;30 percent 
D) 95 percent;5 percent

Question 7

A real estate investment that is most similar to a mutual fund specializing in real estate investment is called a

Accepted Answer

A) real estate agency bond. 
B) pass-through property bond. 
C) property trust. 
D) real estate investment trust. 
E) none of the above. 
A) real estate agency bond. 
B) pass-through property bond. 
C) property trust. 
D) real estate investment trust. 
E) none of the above.

Question 8

Bonds reduce risk through diversification.

Accepted Answer

A) True 
 B)False

Question 9

A secured bond is one that is backed by collateral.

Accepted Answer

A) True 
 B)False

Question 10

Pedro is trying to take advantage of the bond valuation relationships.He has figured out that when you expect interest rates to go up,buy ________ bonds and when you expect interest rates to go down,buy ________.

Accepted Answer

A) government bonds;short-term bonds 
B) interest-indexed bonds;long-term bonds 
C) very long-term;bonds with very short-term maturities that are not callable 
D) very short-term;bonds with very long-term maturities that are not callable 
E) interest-proof;long-term bonds 
A) government bonds;short-term bonds 
B) interest-indexed bonds;long-term bonds 
C) very long-term;bonds with very short-term maturities that are not callable 
D) very short-term;bonds with very long-term maturities that are not callable 
E) interest-proof;long-term bonds

Question 11

If an asset doesn't earn a return,its value is determined by supply and demand.

Accepted Answer

A) True 
 B)False

Question 12

Michael Milkman has suggested that you consider the purchase of some bonds that are rated BB or below.He is asking you to purchase ________ bonds.

Accepted Answer

A) junk 
B) very risky 
C) high-yield 
D) All of the above 
E) Only A and B. 
A) junk 
B) very risky 
C) high-yield 
D) All of the above 
E) Only A and B.

Question 13

A corporation that issues preferred stock will mostly likely call the stock when the market rates of interest increase.

Accepted Answer

A) True 
 B)False

Question 14

Brittany has learned in her research that ________ are issued by the FNMA and the FHLB.

Accepted Answer

A) pass-through certificates 
B) agency bonds 
C) treasury bonds 
D) treasury inflation-indexed bonds 
A) pass-through certificates 
B) agency bonds 
C) treasury bonds 
D) treasury inflation-indexed bonds

Question 15

A bond is selling at par value of $1,000 with 10 years to maturity and pays an 8% coupon rate annually.What is the YTM?

Accepted Answer

A) 6% 
B) 10% 
C) 8% 
D) 9.1% 
A) 6% 
B) 10% 
C) 8% 
D) 9.1%

Question 16

What,if any,are the pros and cons of speculating in precious metals,precious gems,and collectibles?

Accepted Answer

When timed correctly,these speculations

Question 17

A corporate bond with a face value of $1,000 is currently selling at par,and pays an 8% yield to maturity.Which of the following statements concerning this bond is true?

Accepted Answer

A) Its current market price is $1,000. 
B) Its current semi-annual coupon payment is $40. 
C) Its current yield is 8%. 
D) All of the above are correct. 
E) Only B and C are correct. 
A) Its current market price is $1,000. 
B) Its current semi-annual coupon payment is $40. 
C) Its current yield is 8%. 
D) All of the above are correct. 
E) Only B and C are correct.

Question 18

Any bond that is backed by the pledge of collateral is known as what type of bond?

Accepted Answer

A) Collateralized 
B) Secured 
C) Recalled 
D) Sinking 
E) Agency 
A) Collateralized 
B) Secured 
C) Recalled 
D) Sinking 
E) Agency

Question 19

The market price of preferred stock is inversely related to the market rates of interest.

Accepted Answer

A) True 
 B)False

Question 20

There is an inverse relationship between interest rates and bond values.

Accepted Answer

A) True 
 B)False

In comparing municipal bonds to other taxable bonds,the comparison must be between equivalent taxable yields.

Why are the tax implications of investing in bonds more involved than the tax implications of investing in common stock?

Collectibles such as baseball cards and beanie babies can be fun,but one should not expect them to provide for your financial future.

When interest rates rise,bond values drop,and when interest rates drop,bond values rise.Using this inverse relationship,develop a two-part strategy for the bond investor.

The long-term bond you own was issued by IBM Corporation and used no collateral.This is an example of a(n)

According to the Morgan Stanley REIT Index,REITs fell by about between March 2007 and March 2009.Then between March 2009 and March 2017,the Morgan Stanley REIT Index rose by more than two and a half times,but REITs were still down from their 2007 high.

A real estate investment that is most similar to a mutual fund specializing in real estate investment is called a

Bonds reduce risk through diversification.

A secured bond is one that is backed by collateral.

Pedro is trying to take advantage of the bond valuation relationships.He has figured out that when you expect interest rates to go up,buy bonds and when you expect interest rates to go down,buy .

If an asset doesn't earn a return,its value is determined by supply and demand.

Michael Milkman has suggested that you consider the purchase of some bonds that are rated BB or below.He is asking you to purchase ________ bonds.

A corporation that issues preferred stock will mostly likely call the stock when the market rates of interest increase.

Brittany has learned in her research that ________ are issued by the FNMA and the FHLB.

A bond is selling at par value of $1,000 with 10 years to maturity and pays an 8% coupon rate annually.What is the YTM?

What,if any,are the pros and cons of speculating in precious metals,precious gems,and collectibles?

A corporate bond with a face value of $1,000 is currently selling at par,and pays an 8% yield to maturity.Which of the following statements concerning this bond is true?

Any bond that is backed by the pledge of collateral is known as what type of bond?

The market price of preferred stock is inversely related to the market rates of interest.

There is an inverse relationship between interest rates and bond values.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 13: Investing in Bonds and Other Alternatives

In comparing municipal bonds to other taxable bonds,the comparison must be between equivalent taxable yields.

Why are the tax implications of investing in bonds more involved than the tax implications of investing in common stock?

Collectibles such as baseball cards and beanie babies can be fun,but one should not expect them to provide for your financial future.

When interest rates rise,bond values drop,and when interest rates drop,bond values rise.Using this inverse relationship,develop a two-part strategy for the bond investor.

The long-term bond you own was issued by IBM Corporation and used no collateral.This is an example of a(n)

According to the Morgan Stanley REIT Index,REITs fell by about ________ between March 2007 and March 2009.Then between March 2009 and March 2017,the Morgan Stanley REIT Index rose by more than two and a half times,but REITs were still down ________ from their 2007 high.

A real estate investment that is most similar to a mutual fund specializing in real estate investment is called a

Bonds reduce risk through diversification.

A secured bond is one that is backed by collateral.

Pedro is trying to take advantage of the bond valuation relationships.He has figured out that when you expect interest rates to go up,buy ________ bonds and when you expect interest rates to go down,buy ________.

If an asset doesn't earn a return,its value is determined by supply and demand.

Michael Milkman has suggested that you consider the purchase of some bonds that are rated BB or below.He is asking you to purchase ________ bonds.

A corporation that issues preferred stock will mostly likely call the stock when the market rates of interest increase.

Brittany has learned in her research that ________ are issued by the FNMA and the FHLB.

A bond is selling at par value of $1,000 with 10 years to maturity and pays an 8% coupon rate annually.What is the YTM?

What,if any,are the pros and cons of speculating in precious metals,precious gems,and collectibles?

A corporate bond with a face value of $1,000 is currently selling at par,and pays an 8% yield to maturity.Which of the following statements concerning this bond is true?

Any bond that is backed by the pledge of collateral is known as what type of bond?

The market price of preferred stock is inversely related to the market rates of interest.

There is an inverse relationship between interest rates and bond values.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

According to the Morgan Stanley REIT Index,REITs fell by about between March 2007 and March 2009.Then between March 2009 and March 2017,the Morgan Stanley REIT Index rose by more than two and a half times,but REITs were still down from their 2007 high.

Pedro is trying to take advantage of the bond valuation relationships.He has figured out that when you expect interest rates to go up,buy bonds and when you expect interest rates to go down,buy .