Question 1

Which one of the following is issued by state and local governments?

Accepted Answer

A)  Treasury bond
B)  Treasury bill
C)  Municipal bond
D)  Corporate bond
E)  Common stockF) A) and D)
G) B) and D)

Question 2

The legal conditions for a corporate bond are described in the:

Accepted Answer

A)  trustee contract.
B)  bondholder's covenant.
C)  corporate charter.
D)  bond indenture.
E)  bond debenture.F) B) and E)
G) A) and E) D

Question 3

Which type of bond would provide a high degree of price stability,because the bonds are not very sensitive to changing interest rates?

Accepted Answer

A)  Discount
B)  Short-term
C)  Long-term
D)  Speculative
E)  registeredF) B) and E)
G) C) and D)

Question 4

Many financial experts recommend bond funds for very large investors,because these investments offer diversification and professional management.

Accepted Answer

A) True 
 B)False

Question 5

For government bonds,the difference between the bid price and the ask price is called the:

Accepted Answer

A)  dirty price.
B)  asked price.
C)  spread.
D)  clean price.
E)  quoted price.F) B) and E)
G) B) and D)

Question 6

Which of the following factors is used to calculate the total return on the sale of a bond?

Accepted Answer

A)  commission when bond was purchased
B)  interest earned on the bond
C)  cost of the bond when purchased
D)  dollar return when the bond was sold
E)  All of theseF) C) and E)
G) C) and D) E

Question 7

Treasury bills are issued in minimum units of $10,000 with maturities that range from 10 to 30 years.

Accepted Answer

A) True 
 B)False

Question 8

When investing in bonds,there are a lot of factors to consider.To help you decide if a bond is a good investment that will help you reach your financial goals,list 4 steps you can take.

Accepted Answer

1.Determine what type of bond you want.
...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following are owned by a company and can be used to secure a mortgage bond?

Accepted Answer

A)  Dividends
B)  Bond indentures
C)  Liabilities
D)  Interest payments
E)  AssetsF) None of the above
G) C) and D)

Question 11

Treasury notes are issued in $100 units with a maturity of more than 1 year but not more than 10 years.

Accepted Answer

A) True 
 B)False

Question 12

June Tavia is trying to calculate the taxable equivalent yield for a municipal bond.If the bond she owns pays 4.5 percent interest and she is in the 25 percent tax bracket,what is the taxable-equivalent yield?

Accepted Answer

A)  4.50 percent
B)  5.50 percent
C)  6.00 percent
D)  7.72 percent
E)  6.93 percentF) B) and E)
G) A) and E)

Question 13

Which is true of convertible bonds?

Accepted Answer

A)  They pay both interest and dividends simultaneously.
B)  They pay no interest payments.
C)  They can be repurchased by the issuer before the maturity date.
D)  Not all convertible bonds are quality investments.
E)  They are secured by the FDIC.F) A) and B)
G) A) and C)

Question 14

The highest bond rating issued by Moody's is:

Accepted Answer

A)  AAA.
B)  Aaa.
C)  A+.
D)  BB.
E)  AA.F) A) and B)
G) A) and C)

Question 15

A type of bond that is still issued by corporations in foreign countries,but is no longer issued by U.S.corporations is called a:

Accepted Answer

A)  registered bond.
B)  bearer bond.
C)  registered coupon bond.
D)  serial bond.
E)  mortgage bond.F) C) and D)
G) A) and C)

Question 16

For both Moody's and Standard & Poor's,the first two categories (high-grade and medium-grade)represent investment-grade securities.

Accepted Answer

A) True 
 B)False

Question 17

If overall interest rates in the economy rise,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.F) A) and B)
G) A) and C) B

Question 18

Sandra 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)  mortgage
C)  speculative
D)  convertible
E)  subordinated debentureF) B) and D)
G) A) and B)

Question 19

Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds?

Accepted Answer

A)  Serial
B)  Default
C)  Sinking fund
D)  Low-coupon
E)  ConvertibleF) A) and D)
G) C) and D)

Question 20

What is the difference between a U.S.government Treasury bill,Treasury note,and Treasury bond?

Accepted Answer

sometimes called T-bills,are issued in m...

Exam 15: Investing in Bonds

Which one of the following is issued by state and local governments?

Correct AnswerverifiedShow Answer

The legal conditions for a corporate bond are described in the:

Correct AnswerverifiedD

Which type of bond would provide a high degree of price stability,because the bonds are not very sensitive to changing interest rates?

Correct AnswerverifiedShow Answer

Many financial experts recommend bond funds for very large investors,because these investments offer diversification and professional management.

Correct AnswerverifiedShow Answer

For government bonds,the difference between the bid price and the ask price is called the:

Correct AnswerverifiedShow Answer

Which of the following factors is used to calculate the total return on the sale of a bond?

Correct AnswerAnswered by ExamLex AIE

Treasury bills are issued in minimum units of $10,000 with maturities that range from 10 to 30 years.

Correct AnswerverifiedShow Answer

When investing in bonds,there are a lot of factors to consider.To help you decide if a bond is a good investment that will help you reach your financial goals,list 4 steps you can take.

Correct Answerverified1.Determine what type of bond you want....View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following are owned by a company and can be used to secure a mortgage bond?

Correct AnswerverifiedShow Answer

Treasury notes are issued in $100 units with a maturity of more than 1 year but not more than 10 years.

Correct AnswerverifiedShow Answer

June Tavia is trying to calculate the taxable equivalent yield for a municipal bond.If the bond she owns pays 4.5 percent interest and she is in the 25 percent tax bracket,what is the taxable-equivalent yield?

Correct AnswerverifiedShow Answer

Which is true of convertible bonds?

Correct AnswerverifiedShow Answer

The highest bond rating issued by Moody's is:

Correct AnswerverifiedShow Answer

A type of bond that is still issued by corporations in foreign countries,but is no longer issued by U.S.corporations is called a:

Correct AnswerverifiedShow Answer

For both Moody's and Standard & Poor's,the first two categories (high-grade and medium-grade)represent investment-grade securities.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

Sandra 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.

Correct AnswerverifiedShow Answer

Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds?

Correct AnswerverifiedShow Answer

What is the difference between a U.S.government Treasury bill,Treasury note,and Treasury bond?

Correct Answerverifiedsometimes called T-bills,are issued in m...View AnswerShow Answer

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D

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Answered by ExamLex AI
E

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1.Determine what type of bond you want.
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B

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sometimes called T-bills,are issued in m...
View Answer