Question 1

A bond currently sells for $925,has 7 years left to maturity and pays a 9% annual coupon.What is the YTM?

Accepted Answer

A) 8.48% 
B) 10.57% 
C) 9% 
D) 11.25% 
A) 8.48% 
B) 10.57% 
C) 9% 
D) 11.25%

Question 2

Which of the following best describes preferred stock?

Accepted Answer

A) Like an indenture,it represents a legal obligation to the firm to pay dividends. 
B) Like common stock,it represents an equity claim on the assets and earnings of the firm. 
C) Like a bond,it pays out a fixed stream of income ahead of any common stock dividends. 
D) All of the above are correct. 
E) Only B and C are correct. 
A) Like an indenture,it represents a legal obligation to the firm to pay dividends. 
B) Like common stock,it represents an equity claim on the assets and earnings of the firm. 
C) Like a bond,it pays out a fixed stream of income ahead of any common stock dividends. 
D) All of the above are correct. 
E) Only B and C are correct.

Question 3

How would you go about rating bonds as a possible investment?

Accepted Answer

Practically speaking,the first thing to

Question 4

TIPS are treasury bonds for which the par value changes with the consumer price index.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following determines what the annual interest payment on a bond will be?

Accepted Answer

A) The par value of the bond 
B) The maturity date of the bond 
C) The coupon rate of the bond 
D) All of the above are correct. 
E) Only A and C are correct. 
A) The par value of the bond 
B) The maturity date of the bond 
C) The coupon rate of the bond 
D) All of the above are correct. 
E) Only A and C are correct.

Question 6

A share of preferred stock pays dividends of $12 per year.What is the value to you if you require a 9.5% rate of return?

Accepted Answer

A) $12.63 
B) $15.62 
C) $126.32 
D) $1,263.16 
A) $12.63 
B) $15.62 
C) $126.32 
D) $1,263.16

Question 7

Gold and precious gems should hold a place in any diversified retirement portfolio.

Accepted Answer

A) True 
 B)False

Question 8

Suppose that you have a bond that has a par value of $1,000 and a coupon interest rate of 9%.Its current price is $950 and it will mature in 7 years.What is the yield to maturity?

Accepted Answer

A) 8.45% 
B) 9.00% 
C) 10.03% 
D) 10.23% 
A) 8.45% 
B) 9.00% 
C) 10.03% 
D) 10.23%

Question 9

When a preferred stock requires that all past unpaid preferred stock dividends must be paid before any common stock dividends can be declared,this preferred stock has a ________ feature.

Accepted Answer

A) non-payment 
B) cumulative 
C) dividend protection 
D) risk-minimization 
E) none of the above 
A) non-payment 
B) cumulative 
C) dividend protection 
D) risk-minimization 
E) none of the above

Question 10

The difference between Treasury Bills,Notes and Bonds are

Accepted Answer

A) taxes. 
B) default risk. 
C) types of governments issuing. 
D) maturity. 
A) taxes. 
B) default risk. 
C) types of governments issuing. 
D) maturity.

Question 11

A debenture is a long-term bond secured by collateral.

Accepted Answer

A) True 
 B)False

Question 12

Callable bonds tend to be called when interest rates

Accepted Answer

A) go up. 
B) stay about the same. 
C) go down. 
D) move in an upward pattern. 
A) go up. 
B) stay about the same. 
C) go down. 
D) move in an upward pattern.

Question 13

Coupon interest is usually paid in quarterly installments.

Accepted Answer

A) True 
 B)False

Question 14

You are considering the purchase of one of two different bonds,a muni,which currently yields 6%,and a corporate,which currently yields 10%.If you are trying to maximize your return and you are in a 38% tax bracket,which of the following is true?

Accepted Answer

A) The muni bond has a better yield for you. 
B) The corporate bond has a better yield for you. 
C) The bonds have identical yields for you. 
D) There is not enough information to determine which is a better yield for you. 
A) The muni bond has a better yield for you. 
B) The corporate bond has a better yield for you. 
C) The bonds have identical yields for you. 
D) There is not enough information to determine which is a better yield for you.

Question 15

The main advantage to investing in real estate is liquidity.

Accepted Answer

A) True 
 B)False

Question 16

What would be your equivalent taxable yield if you are in a 35% tax bracket and can earn 6% on a municipal bond?

Accepted Answer

A) 10.24% 
B) 9.23% 
C) 17.1% 
D) 6% 
A) 10.24% 
B) 9.23% 
C) 17.1% 
D) 6%

Question 17

If you were considering the purchase of a bond issued by a state,county,or city you would be considering the purchase of a ________ bond.

Accepted Answer

A) state 
B) municipal 
C) government hedge 
D) corporate 
E) none of the above 
A) state 
B) municipal 
C) government hedge 
D) corporate 
E) none of the above

Question 18

What is the best strategy recommended in your textbook for collectibles?

Accepted Answer

A) Buy and hold. 
B) Buy low,sell high. 
C) Avoid them as an investment. 
D) Buy high,sell higher. 
E) none of the above 
A) Buy and hold. 
B) Buy low,sell high. 
C) Avoid them as an investment. 
D) Buy high,sell higher. 
E) none of the above

Question 19

There are dangers present in bond investing.Tell everyone what they all are.

Accepted Answer

If interest rates rise,bond prices will

Question 20

An unsecured long-term bond is known as a(n)

Accepted Answer

A) bondenture. 
B) indenture. 
C) debenture. 
D) abdenture. 
A) bondenture. 
B) indenture. 
C) debenture. 
D) abdenture.

A bond currently sells for $925,has 7 years left to maturity and pays a 9% annual coupon.What is the YTM?

Which of the following best describes preferred stock?

How would you go about rating bonds as a possible investment?

TIPS are treasury bonds for which the par value changes with the consumer price index.

Which of the following determines what the annual interest payment on a bond will be?

A share of preferred stock pays dividends of $12 per year.What is the value to you if you require a 9.5% rate of return?

Gold and precious gems should hold a place in any diversified retirement portfolio.

Suppose that you have a bond that has a par value of $1,000 and a coupon interest rate of 9%.Its current price is $950 and it will mature in 7 years.What is the yield to maturity?

When a preferred stock requires that all past unpaid preferred stock dividends must be paid before any common stock dividends can be declared,this preferred stock has a ________ feature.

The difference between Treasury Bills,Notes and Bonds are

A debenture is a long-term bond secured by collateral.

Callable bonds tend to be called when interest rates

Coupon interest is usually paid in quarterly installments.

You are considering the purchase of one of two different bonds,a muni,which currently yields 6%,and a corporate,which currently yields 10%.If you are trying to maximize your return and you are in a 38% tax bracket,which of the following is true?

The main advantage to investing in real estate is liquidity.

What would be your equivalent taxable yield if you are in a 35% tax bracket and can earn 6% on a municipal bond?

If you were considering the purchase of a bond issued by a state,county,or city you would be considering the purchase of a ________ bond.

What is the best strategy recommended in your textbook for collectibles?

There are dangers present in bond investing.Tell everyone what they all are.

An unsecured long-term bond is known as a(n)

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

A bond currently sells for $925,has 7 years left to maturity and pays a 9% annual coupon.What is the YTM?

Which of the following best describes preferred stock?

How would you go about rating bonds as a possible investment?

TIPS are treasury bonds for which the par value changes with the consumer price index.

Which of the following determines what the annual interest payment on a bond will be?

A share of preferred stock pays dividends of $12 per year.What is the value to you if you require a 9.5% rate of return?

Gold and precious gems should hold a place in any diversified retirement portfolio.

Suppose that you have a bond that has a par value of $1,000 and a coupon interest rate of 9%.Its current price is $950 and it will mature in 7 years.What is the yield to maturity?

When a preferred stock requires that all past unpaid preferred stock dividends must be paid before any common stock dividends can be declared,this preferred stock has a ________ feature.

The difference between Treasury Bills,Notes and Bonds are

A debenture is a long-term bond secured by collateral.

Callable bonds tend to be called when interest rates

Coupon interest is usually paid in quarterly installments.

You are considering the purchase of one of two different bonds,a muni,which currently yields 6%,and a corporate,which currently yields 10%.If you are trying to maximize your return and you are in a 38% tax bracket,which of the following is true?

The main advantage to investing in real estate is liquidity.

What would be your equivalent taxable yield if you are in a 35% tax bracket and can earn 6% on a municipal bond?

If you were considering the purchase of a bond issued by a state,county,or city you would be considering the purchase of a ________ bond.

What is the best strategy recommended in your textbook for collectibles?

There are dangers present in bond investing.Tell everyone what they all are.

An unsecured long-term bond is known as a(n)

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