Question 1

Large or jumbo CDs are $100,000 or greater in size.

Accepted Answer

A) True 
 B)False  True

Question 2

A provision in which semiannual or annual contributions are made by a corporation into a fund administered by a trustee for purposes of debt retirement is referred to as a:

Accepted Answer

A) call provision. 
B) put provision. 
C) sinking-fund provision. 
D) serial payment. 
A) call provision. 
B) put provision. 
C) sinking-fund provision. 
D) serial payment. C

Question 3

Assume a $1,000 Treasury bill is quoted to pay 10% and matures in 3 months.
a)How much interest would an investor receive?
b)What will be the price of the Treasury bill?
c)What will be the true rate of return?

Accepted Answer

a)2.5%
b)$975
c)10.25%

Question 4

A corporate bond quoted at 108.25 is selling for:

Accepted Answer

A) $108.25. 
B) $1,082.50. 
C) $10,825. 
D) None of the above 
A) $108.25. 
B) $1,082.50. 
C) $10,825. 
D) None of the above

Question 5

Corporate issues make up the largest percentage of new debt offerings in the bond market.

Accepted Answer

A) True 
 B)False

Question 6

Commercial paper represents a short-term credit instrument.

Accepted Answer

A) True 
 B)False

Question 7

A split rating means that bond-rating agencies assigned different ratings.

Accepted Answer

A) True 
 B)False

Question 8

Income bonds specify that interest is to be paid only to the extent that it is earned in current income.

Accepted Answer

A) True 
 B)False

Question 9

Securities issued by the Federal Farm Credit Bank

Accepted Answer

A) are essentially risk-free. 
B) carry a higher yield than U.S.Treasury securities. 
C) are fully taxable by federal,state,and local governments. 
D) All of the above 
A) are essentially risk-free. 
B) carry a higher yield than U.S.Treasury securities. 
C) are fully taxable by federal,state,and local governments. 
D) All of the above

Question 10

What is the dollar value of a U.S.government bond quoted at 98 8/32?

Accepted Answer

The answer of What is the dollar value of a...

Question 11

Foreign-pay bonds are issued in a foreign country and are payable in U.S.dollars.

Accepted Answer

A) True 
 B)False

Question 12

All of the following are available to individual investors except:

Accepted Answer

A) commercial paper. 
B) bankers' acceptances. 
C) money market funds. 
D) All of the above are available to individual investors 
A) commercial paper. 
B) bankers' acceptances. 
C) money market funds. 
D) All of the above are available to individual investors

Question 13

A bond quote of 91 7/8 on a $1,000 par value bond means the bond is trading at $918.75.

Accepted Answer

A) True 
 B)False

Question 14

A Treasury note normally has a maturity of:

Accepted Answer

A) less than one year. 
B) 1 to 5 years. 
C) 1 to 10 years. 
D) 10 to 30 years. 
E) 30 to 100 years. 
A) less than one year. 
B) 1 to 5 years. 
C) 1 to 10 years. 
D) 10 to 30 years. 
E) 30 to 100 years.

Question 15

The largest segment of the corporate bond market consists of

Accepted Answer

A) public utilities. 
B) rails and transportation. 
C) financial issues. 
D) industrial issues. 
A) public utilities. 
B) rails and transportation. 
C) financial issues. 
D) industrial issues.

Question 16

Foreign bonds normally provide:

Accepted Answer

A) higher yields than U.S.bonds. 
B) lower yields than U.S.bonds. 
C) diversification benefits. 
D) None of the above 
A) higher yields than U.S.bonds. 
B) lower yields than U.S.bonds. 
C) diversification benefits. 
D) None of the above

Question 17

The bond market investor must be prepared to deal in a relatively strong primary market (new issues market)and a relatively weak secondary market (resale market).

Accepted Answer

A) True 
 B)False

Question 18

Assume a $1,000 Treasury bill is quoted to pay 9.5% interest over a six-month period.
a)How much interest would an investor receive?
b)What will be the price of the Treasury bill?
c)What will be the true rate of return?

Accepted Answer

a)$47.50
b

Question 19

A call provision allows the corporation to retire a bond before maturity by paying a small discount below par value.

Accepted Answer

A) True 
 B)False

Question 20

The bond market is dominated by institutional investors.

Accepted Answer

A) True 
 B)False

Exam 10: Bond and Fixed-Income Fundamentals

Large or jumbo CDs are $100,000 or greater in size.

A provision in which semiannual or annual contributions are made by a corporation into a fund administered by a trustee for purposes of debt retirement is referred to as a:

Assume a $1,000 Treasury bill is quoted to pay 10% and matures in 3 months. a)How much interest would an investor receive? b)What will be the price of the Treasury bill? c)What will be the true rate of return?

A corporate bond quoted at 108.25 is selling for:

Corporate issues make up the largest percentage of new debt offerings in the bond market.

Commercial paper represents a short-term credit instrument.

A split rating means that bond-rating agencies assigned different ratings.

Income bonds specify that interest is to be paid only to the extent that it is earned in current income.

Securities issued by the Federal Farm Credit Bank

What is the dollar value of a U.S.government bond quoted at 98 8/32?

Foreign-pay bonds are issued in a foreign country and are payable in U.S.dollars.

All of the following are available to individual investors except:

A bond quote of 91 7/8 on a $1,000 par value bond means the bond is trading at $918.75.

A Treasury note normally has a maturity of:

The largest segment of the corporate bond market consists of

Foreign bonds normally provide:

The bond market investor must be prepared to deal in a relatively strong primary market (new issues market)and a relatively weak secondary market (resale market).

Assume a $1,000 Treasury bill is quoted to pay 9.5% interest over a six-month period. a)How much interest would an investor receive? b)What will be the price of the Treasury bill? c)What will be the true rate of return?

A call provision allows the corporation to retire a bond before maturity by paying a small discount below par value.

The bond market is dominated by institutional investors.

The Investment Setting

Security Markets

Participating in the Market

Investment Companies: Mutual Funds, exchange-Traded Funds, closed-End Funds, and Unit Investment Trusts

Economic Activity

Industry Analysis

Financial Statement Analysis

Efficient Markets and Anomalies

Behavioral Finance and Technical Analysis

Principles of Bond Valuation and Investment

Convertible Securities and Warrants

Commodities and Financial Futures

Stock Index Futures and Options

A Basic Look at Portfolio Management and Capital Market Theory

Duration and Bond Portfolio Management

International Securities Markets

Investments in Real Assets

Alternative Investments: Private Equity and Hedge Funds

Measuring Risks and Returns of Portfolio Managers

a Comprehensive Analysis for Real Estate Investment Decisions

the Makeup of Institutional Investors

Filters