Question 1

A U.S.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. 
A)  Subordinated bond. 
B)  Treasury bill. 
C)  Treasury note. 
D)  Treasury bond. 
E)  Savings bond.

Question 2

Describe the steps you can take to manage an economic crisis.

Accepted Answer

Seven steps include these:
1.Establish a

Question 3

Which of the following is not a U.S.Treasury security?

Accepted Answer

A)  Treasury note 
B)  Treasury bond 
C)  Treasury Inflation-Protected Securities (TIPS) 
D)  Treasury stock 
E)  Treasury bill 
A)  Treasury note 
B)  Treasury bond 
C)  Treasury Inflation-Protected Securities (TIPS) 
D)  Treasury stock 
E)  Treasury bill

Question 4

A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n)____________ fund.

Accepted Answer

A)  serial 
B)  sinking 
C)  debenture 
D)  indenture 
E)  money 
A)  serial 
B)  sinking 
C)  debenture 
D)  indenture 
E)  money

Question 5

Which of the following statements is true?

Accepted Answer

A)  Convertible corporate bonds are more secure than government bonds. 
B)  Convertible bonds often pay 1-2% more interest than nonconvertible bonds. 
C)  Because of the conversion feature, it is not necessary to evaluate convertible corporate bonds. 
D)  Not all convertible bonds are quality investments. 
E)  Even after convertible bondholders convert their investments to common stock, the bondholders still receive interest payments. 
A)  Convertible corporate bonds are more secure than government bonds. 
B)  Convertible bonds often pay 1-2% more interest than nonconvertible bonds. 
C)  Because of the conversion feature, it is not necessary to evaluate convertible corporate bonds. 
D)  Not all convertible bonds are quality investments. 
E)  Even after convertible bondholders convert their investments to common stock, the bondholders still receive interest payments.

Question 6

Continuing to evaluate your investment after its purchase can reduce your inflation risk.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following features is a benefit for investors of municipal bonds?

Accepted Answer

A)  Interest may be tax-exempt at the federal level. 
B)  Interest may be tax-deductible at the federal level. 
C)  The face value may be tax-deductible at the state level. 
D)  The face value may be a tax credit at the federal level. 
E)  All payments are tax-deductible at all governmental levels. 
A)  Interest may be tax-exempt at the federal level. 
B)  Interest may be tax-deductible at the federal level. 
C)  The face value may be tax-deductible at the state level. 
D)  The face value may be a tax credit at the federal level. 
E)  All payments are tax-deductible at all governmental levels.

Question 8

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 9

Assume that you purchase a $1,000 bond issued by Harley-Davidson that pays 6% interest each year,paid semiannually.What is the amount of each interest payment?

Accepted Answer

A)  $3.00 
B)  $6.00 
C)  $30.00 
D)  $60.00 
E)  $1,000 
A)  $3.00 
B)  $6.00 
C)  $30.00 
D)  $60.00 
E)  $1,000

Question 10

Contrast the types of investments typically chosen for the following two investors:
a.Retired couple with $850,000 in retirement savings.
b.A 25-year-old single investor with a secure high-paying job.

Accepted Answer

The young investor would likely choose t

Question 11

To survive a financial crisis,you should track the value of your stock,mutual fund,and retirement accounts.

Accepted Answer

A) True 
 B)False

Question 12

The potential return of any investment should be directly related to the risk that the investor assumes.

Accepted Answer

A) True 
 B)False

Question 13

Cliff Clarkson is 70 years old and wants to diversify his investment portfolio.He must decide if he should invest in tax-free municipal bonds or in corporate bonds.The tax-free bonds are highly rated and pay 4.5%.The corporate bonds are more speculative and pay 6.5%
a.If Cliff is in the 25% tax bracket,what is the taxable equivalent yield for the municipal bond?
b.If you were Cliff,would you choose the municipal bonds or the corporate bonds?
 Justify your answer.

Accepted Answer

a.Taxable equivalent yield = Tax-exempt

Question 14

Generally,interest on corporate bonds is normally paid every

Accepted Answer

A)  Month. 
B)  Three months. 
C)  Six months. 
D)  Nine months. 
E)  Year. 
A)  Month. 
B)  Three months. 
C)  Six months. 
D)  Nine months. 
E)  Year.

Question 15

Describe asset allocation and its importance.

Accepted Answer

Asset allocation is the process of sprea

Question 16

A call feature

Accepted Answer

A)  Allows bondholders to convert their bonds to a specified number of shares of common stock. 
B)  Is not available for corporate bonds. 
C)  Allows the corporation to buy outstanding bonds from current bondholders before the maturity date. 
D)  Is available only with government securities. 
E)  Is guaranteed by the corporation. 
A)  Allows bondholders to convert their bonds to a specified number of shares of common stock. 
B)  Is not available for corporate bonds. 
C)  Allows the corporation to buy outstanding bonds from current bondholders before the maturity date. 
D)  Is available only with government securities. 
E)  Is guaranteed by the corporation.

Question 17

At the least,you should keep purchase records of the actual dollar cost of your investments plus any commissions or fees paid.

Accepted Answer

A) True 
 B)False

Question 18

Gwendolyn and Jack Francis are typical investors.As they approach retirement,which approach will they likely take?

Accepted Answer

A)  They will choose more speculative investments. 
B)  Their choices of investments will not change. 
C)  They will choose more conservative investments. 
D)  They will choose more risky investments. 
E)  They will move all of their money into certificates of deposit. 
A)  They will choose more speculative investments. 
B)  Their choices of investments will not change. 
C)  They will choose more conservative investments. 
D)  They will choose more risky investments. 
E)  They will move all of their money into certificates of deposit.

Question 19

List five items that appear in a corporate bond quote.

Accepted Answer

Possible answers include these:
• Corpor

Question 20

A valid long-term investment goal is

Accepted Answer

A)  Saving $4,000 per year for 40 years for retirement. 
B)  Spending less than $500 per month for housing. 
C)  Accumulating $3,000 in a savings account over the next 18 months. 
D)  Using credit cards less in the next six months. 
E)  Purchasing a $250,000 life insurance policy within the next four years. 
A)  Saving $4,000 per year for 40 years for retirement. 
B)  Spending less than $500 per month for housing. 
C)  Accumulating $3,000 in a savings account over the next 18 months. 
D)  Using credit cards less in the next six months. 
E)  Purchasing a $250,000 life insurance policy within the next four years.

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

Describe the steps you can take to manage an economic crisis.

Which of the following is not a U.S.Treasury security?

A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n)____________ fund.

Which of the following statements is true?

Continuing to evaluate your investment after its purchase can reduce your inflation risk.

Which of the following features is a benefit for investors of municipal bonds?

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

Assume that you purchase a $1,000 bond issued by Harley-Davidson that pays 6% interest each year,paid semiannually.What is the amount of each interest payment?

Contrast the types of investments typically chosen for the following two investors: a.Retired couple with $850,000 in retirement savings. b.A 25-year-old single investor with a secure high-paying job.

To survive a financial crisis,you should track the value of your stock,mutual fund,and retirement accounts.

The potential return of any investment should be directly related to the risk that the investor assumes.

Generally,interest on corporate bonds is normally paid every

Describe asset allocation and its importance.

A call feature

At the least,you should keep purchase records of the actual dollar cost of your investments plus any commissions or fees paid.

Gwendolyn and Jack Francis are typical investors.As they approach retirement,which approach will they likely take?

List five items that appear in a corporate bond quote.

A valid long-term investment goal is

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 11: Investing Basics and Evaluating Bonds

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

Describe the steps you can take to manage an economic crisis.

Which of the following is not a U.S.Treasury security?

A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n)____________ fund.

Which of the following statements is true?

Continuing to evaluate your investment after its purchase can reduce your inflation risk.

Which of the following features is a benefit for investors of municipal bonds?

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

Assume that you purchase a $1,000 bond issued by Harley-Davidson that pays 6% interest each year,paid semiannually.What is the amount of each interest payment?

Contrast the types of investments typically chosen for the following two investors: a.Retired couple with $850,000 in retirement savings. b.A 25-year-old single investor with a secure high-paying job.

To survive a financial crisis,you should track the value of your stock,mutual fund,and retirement accounts.

The potential return of any investment should be directly related to the risk that the investor assumes.

Generally,interest on corporate bonds is normally paid every

Describe asset allocation and its importance.

A call feature

At the least,you should keep purchase records of the actual dollar cost of your investments plus any commissions or fees paid.

Gwendolyn and Jack Francis are typical investors.As they approach retirement,which approach will they likely take?

List five items that appear in a corporate bond quote.

A valid long-term investment goal is

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters