Question 1

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

Accepted Answer

Treasury bills,sometimes called T-bills,...

Question 2

Which one of the following statements is correct regarding bond and stock differences?

Accepted Answer

A)  Stock is a form of debt financing.
B)  Stock must be repaid at maturity.
C)  Bonds are a form of debt financing.
D)  Bonds do not have to be repaid at maturity.
E)  Interest payments to bondholders are paid at the discretion of the board of directors.F) B) and E)
G) B) and D)

Question 3

Treasury bills:

Accepted Answer

A)  are rated by Moody's.
B)  pay interest every six months.
C)  are long-term securities issued by the federal government.
D)  are discounted securities.
E)  pay a higher interest rate than corporate bonds.F) None of the above
G) A) and B)

Question 4

A government security issued in minimum units of $100 with maturities that are one year or less is called a:

Accepted Answer

A)  subordinated bond.
B)  Treasury bill.
C)  Treasury note.
D)  Treasury bond.
E)  savings bond.F) All of the above
G) B) and C)

Question 5

A government security issued in minimum units of $100 with a 30-year maturity is called a:

Accepted Answer

A)  subordinated bond.
B)  Treasury bill.
C)  Treasury note.
D)  Treasury bond.
E)  savings bond.F) A) and B)
G) B) and E)

Question 6

The highest bond rating issued by Moody's is:

Accepted Answer

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

Question 7

The financially independent firm 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.F) A) and E)
G) A) and D)

Question 8

Doug Emery purchased a bond that can be exchanged for a set number of shares of the issuer's common stock.What type of bond has Doug purchased?

Accepted Answer

A)  Debenture
B)  Subordinated debenture
C)  Convertible
D)  Callable
E)  High-yieldF) C) and D)
G) A) and C)

Question 9

A corporate bond rated B by Moody's would be suitable for:

Accepted Answer

A)  every investor.
B)  very cautious investors.
C)  speculators.
D)  no one because the bond issue is in default.
E)  investors who are highly dependent upon the interest income.F) C) and D)
G) None of the above

Question 10

A bond that is backed only by the reputation of the issuing corporation is called a(n) ________ bond.

Accepted Answer

A)  debenture
B)  mortgage
C)  indenture
D)  preemptive
E)  treasuryF) All of the above
G) A) and B)

Question 11

Corporate and Treasury bonds generally produce more interest revenue than municipal bonds.Why do investors choose to buy municipal bonds?

Accepted Answer

One of the most important features of mu...

Question 12

Although unpopular a few years back,more and more U.S.corporations are issuing bearer bonds.

Accepted Answer

A) True 
 B)False

Question 13

Which one of the following statements is false regarding corporate bonds?

Accepted Answer

A)  It is possible to obtain information about a corporation that issues a bond by accessing the corporation's website on the internet.
B)  Price information about corporate bonds is available on the internet.
C)  You can research bonds online but you cannot trade them online.
D)  There are fewer websites that provide information on bonds as compared to websites that provide information on stocks.
E)  Many of the better bond websites charge a fee to access their research.F) B) and D)
G) A) and B)

Question 14

For 2018,bond yields for high-quality corporate bonds have been approximately how much?

Accepted Answer

A)  2%
B)  4%
C)  5%
D)  7%
E)  10%F) B) and E)
G) All of the above

Question 15

Scott Turner has a bond with 10 years to maturity,a face value of $1,000,annual interest of $60,and a market price of $600.What is the yield-to-maturity on this bond?

Accepted Answer

A)  6.0 percent
B)  10.0 percent
C)  11.0 percent
D)  11.5 percent
E)  12.5 percentF) C) and E)
G) B) and D)

Question 16

Anyone who is in physical possession of a ________ can collect interest payments and the face value of the bond at maturity regardless of whether or not they are the rightful owner.

Accepted Answer

A)  corporate bond
B)  registered coupon bond
C)  bearer bond
D)  money market account
E)  savings bondF) B) and D)
G) B) and E)

Question 17

According to Moody's,bonds with extremely poor prospects for recovery of principal or interest are rated:

Accepted Answer

A)  A-
B)  B-
C)  C
D)  E
E)  FF) A) and D)
G) B) and C)

Question 18

Dave Johnson's objective was to purchase a government bond that provided some protection against inflation as measured by the consumer price index.To fulfill this objective,John purchased a:

Accepted Answer

A)  T-bill.
B)  T-note.
C)  T-bond.
D)  TIPS.
E)  general obligation bond.F) All of the above
G) B) and D)

Question 19

Which one of the following statements is false?

Accepted Answer

A)  The U.S.government sells bonds to obtain financing.
B)  U) S.government securities carry a decreased risk of default.
C)  Interest on U.S.government securities is taxable for federal income tax purposes.
D)  Most individual investors that purchase Treasury securities bid competitively.
E)  Treasury securities may be purchased directly from banks or brokers.F) A) and E)
G) A) and C)

Question 20

Which of the following can cause the price of a corporate bond to fluctuate until the maturity date?

Accepted Answer

A)  Changes in overall interest rates in the economy
B)  The financial condition of the company issuing the bond
C)  The factors of supply and demand
D)  An upturn or downturn in the economy
E)  All of theseF) A) and B)
G) A) and C)

Exam 15: Investing in Bonds

A bond that is backed only by the reputation of the issuing corporation is called a(n) ________ bond.

Correct AnswerverifiedShow Answer

Which one of the following statements is correct regarding bond and stock differences?

Correct AnswerverifiedShow Answer

Corporate and Treasury bonds generally produce more interest revenue than municipal bonds.Why do investors choose to buy municipal bonds?

Correct AnswerverifiedOne of the most important features of mu...View AnswerShow Answer

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

Correct AnswerverifiedTreasury bills,sometimes called T-bills,...View AnswerShow Answer

Which one of the following statements is false?

Correct AnswerverifiedShow Answer

The highest bond rating issued by Moody's is:

Correct AnswerverifiedShow Answer

Doug Emery purchased a bond that can be exchanged for a set number of shares of the issuer's common stock.What type of bond has Doug purchased?

Correct AnswerverifiedShow Answer

Which one of the following statements is false regarding corporate bonds?

Correct AnswerverifiedShow Answer

Scott Turner has a bond with 10 years to maturity,a face value of $1,000,annual interest of $60,and a market price of $600.What is the yield-to-maturity on this bond?

Correct AnswerverifiedShow Answer

Anyone who is in physical possession of a ________ can collect interest payments and the face value of the bond at maturity regardless of whether or not they are the rightful owner.

Correct AnswerverifiedShow Answer

Treasury bills:

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Dave Johnson's objective was to purchase a government bond that provided some protection against inflation as measured by the consumer price index.To fulfill this objective,John purchased a:

Correct AnswerverifiedShow Answer

Which of the following can cause the price of a corporate bond to fluctuate until the maturity date?

Correct AnswerverifiedShow Answer

According to Moody's,bonds with extremely poor prospects for recovery of principal or interest are rated:

Correct AnswerverifiedShow Answer

A corporate bond rated B by Moody's would be suitable for:

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A government security issued in minimum units of $100 with maturities that are one year or less is called a:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Although unpopular a few years back,more and more U.S.corporations are issuing bearer bonds.

Correct AnswerverifiedShow Answer

For 2018,bond yields for high-quality corporate bonds have been approximately how much?

Correct AnswerverifiedShow Answer

A government security issued in minimum units of $100 with a 30-year maturity is called a:

Correct AnswerverifiedShow Answer

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One of the most important features of mu...
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Treasury bills,sometimes called T-bills,...
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