Question 1

Corporate bonds are a form of equity financing that does not have to be repaid.

Accepted Answer

A) True 
 B)False

Question 2

An issue of serial bonds:

Accepted Answer

A)  will pay no interest payments.
B)  will have varying issue dates.
C)  will have a series of maturity dates.
D)  cannot be calleD.
E)  will all mature ten years from the date of issuE.F) B) and C)
G) A) and B)

Question 3

With the use of technology and computers,the book entry form of bond ownership is no longer used.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following sources can be used by an investor to obtain a corporation's annual report?

Accepted Answer

A)  Internet
B)  corporation's website
C)  800 telephone number
D)  written request
E)  all of the sources listed in the other answersF) B) and C)
G) C) and E)

Question 5

The highest bond rating issued by Moody's is:

Accepted Answer

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

Question 6

If your primary goal is current yield,which one of these bonds is the wiser investment? Bond A: $1,000 corporate bond that pays 7 percent and has a current market value of $800;or Bond B: $1,000 corporate bond that pays 8.25 percent and has a current market value of $950?

Accepted Answer

The answer of If your primary goal is current yield,which...

Question 7

Treasury bonds are issued in $5,000 units with 10-year maturities.

Accepted Answer

A) True 
 B)False

Question 8

What is the current yield for a $1,000 corporate bond that pays 7.5 percent and has a current market value of $950?

Accepted Answer

A)  7.5 percent
B)  7.9 percent
C)  8.4 percent
D)  9.5 percent
E)  8.2 percentF) B) and D)
G) None of the above B

Question 9

The bond debenture is a legal document that details all of the conditions relating to a bond issue.

Accepted Answer

A) True 
 B)False

Question 10

You own a $1,000 bond that pays 9.25 percent interest.What is the amount of interest you will receive each six months?

Accepted Answer

A)  $4.62
B)  $9.25
C)  $92.50
D)  $46.25
E)  $23.13F) D) and E)
G) B) and C)

Question 11

Generally,interest on corporate bonds is paid every:

Accepted Answer

A)  month.
B)  three months.
C)  six months.
D)  nine months.
E)  year.F) A) and B)
G) A) and C)

Question 12

You are trying to evaluate two bond issues.One bond issue is rated "A" by Moody's;the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback,would you purchase the "A" bond or the "B" bond?

Accepted Answer

The answer of You are trying to evaluate two bond...

Question 13

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) A) and E)
G) C) and E) C

Question 14

A bond that is listed in the owner's name by the issuing company is called a ______________ bond.

Accepted Answer

A)  certified
B)  coupon
C)  registered
D)  zero-coupon
E)  general obligationF) B) and C)
G) B) and E)

Question 15

Nancy Groom owns a $1,000 corporate bond that pays 8.5 percent.What is the amount of each interest payment?

Accepted Answer

A)  $4.25
B)  $42.50
C)  $85.00
D)  $850.00
E)  $425.00F) C) and D)
G) D) and E)

Question 16

A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.

Accepted Answer

A) True 
 B)False

Question 17

All bonds in a serial bond issue mature on the same date.

Accepted Answer

A) True 
 B)False

Question 18

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) A) and E)
G) None of the above C

Question 19

Bond interest is typically paid:

Accepted Answer

A)  monthly.
B)  at the time of purchase.
C)  annually.
D)  semiannually.
E)  quarterly.F) A) and B)
G) B) and C)

Question 20

In what ways can a bond investor make money?

Accepted Answer

A bond investor can make money primarily...

Exam 15: Investing in Bonds

Corporate bonds are a form of equity financing that does not have to be repaid.

Correct AnswerverifiedShow Answer

An issue of serial bonds:

Correct AnswerverifiedShow Answer

With the use of technology and computers,the book entry form of bond ownership is no longer used.

Correct AnswerverifiedShow Answer

Which of the following sources can be used by an investor to obtain a corporation's annual report?

Correct AnswerverifiedShow Answer

The highest bond rating issued by Moody's is:

Correct AnswerverifiedShow Answer

If your primary goal is current yield,which one of these bonds is the wiser investment? Bond A: $1,000 corporate bond that pays 7 percent and has a current market value of $800;or Bond B: $1,000 corporate bond that pays 8.25 percent and has a current market value of $950?

Correct AnswerverifiedShow Answer

Treasury bonds are issued in $5,000 units with 10-year maturities.

Correct AnswerverifiedShow Answer

What is the current yield for a $1,000 corporate bond that pays 7.5 percent and has a current market value of $950?

Correct AnswerverifiedB

The bond debenture is a legal document that details all of the conditions relating to a bond issue.

Correct AnswerverifiedShow Answer

You own a $1,000 bond that pays 9.25 percent interest.What is the amount of interest you will receive each six months?

Correct AnswerverifiedShow Answer

Generally,interest on corporate bonds is paid every:

Correct AnswerverifiedShow Answer

You are trying to evaluate two bond issues.One bond issue is rated "A" by Moody's;the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback,would you purchase the "A" bond or the "B" bond?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedC

A bond that is listed in the owner's name by the issuing company is called a ______________ bond.

Correct AnswerverifiedShow Answer

Nancy Groom owns a $1,000 corporate bond that pays 8.5 percent.What is the amount of each interest payment?

Correct AnswerverifiedShow Answer

A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.

Correct AnswerverifiedShow Answer

All bonds in a serial bond issue mature on the same date.

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 AnswerverifiedC

Bond interest is typically paid:

Correct AnswerverifiedShow Answer

In what ways can a bond investor make money?

Correct AnswerAnswered by ExamLex AIA bond investor can make money primarily...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
A bond investor can make money primarily...
View Answer