Exam 10: Bond and Fixed-Income Fundamentals

Municipal bonds normally pay:

Major investors in municipal bonds include:

An example of secured debt would be a:

The primary difference between large (jumbo)and small Certificates of Deposit,besides dollar amount,is:

The junk bond market includes all of the following except:

For the major bond-rating agencies,the lowest level of an investment grade bond is:

Which of the following types of bond issues is the most price-sensitive?

A Treasury bill is a long-term obligation of the federal government.

Assume a $1,000 Treasury bill is quoted to pay 6% interest over a three-month period.What will be the effective yield?

An investor in a municipal bond will receive 8% interest.He is in a 33% tax bracket.The comparable before-tax yield on a taxable investment is 14%.

Preferred stock dividends are tax-deductible to the corporation,and also provide tax advantages to the corporate investor.

Public utility issues have a greater yield than other corporate issues,primarily because:

The higher the bond rating of a corporation,the higher the interest rate that is likely to be paid.

Assume a $1,000 Treasury bill is quoted to pay 6% interest over a three-month period.What will be the price of the Treasury bill?

There is evidence that the bond market may be less efficient than the stock market.

As the yield spread between high and low rating categories increases,this indicates a gain of confidence in the economy.

A bond with a put provision allows the investor to:

The major provisions in the bond agreement are spelled out in the bond debenture.

Interest on federally-sponsored credit agency issues (such as the Federal Home Loan Bank)is not tax-free to the recipient.

Private placements refer exclusively to stock issues sold to insurance companies or individuals.