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Unit 2 QBank Quiz

Terms in this set (20)

An investor purchases a T-bill for $9,925 that will mature at $10,000. The difference between the $9,925 paid and the $10,000 that will be received is
the discount to par and will be considered interest received at maturity
A call feature attached to a bond allows
an issuer to call in a bond before maturity at times that will benefit the issuer
Corporate shareholder structure regarding liability is different from that of a partnership. In recognizing that, which of the following is true?
A corporate shareholder cannot be forced to liquidate personal assets during a corporate bankruptcy.
An income bond is also known as
an adjustment bond and is unsecured
A bank trustee holds the titles to assets a corporation has purchased and utilizes in its day-to-day business. The corporation issues debt securities backed by these assets. These securities are
equipment trust certificates
T-bonds and T-notes
are both priced as a percentage of par
When interest rates in the open market move up or down, a bond's coupon rate will
be unaffected by the open-market interest rates
Treasury bonds mature in
10 years or more
A registered representative speaks to a customer about a particular 6% municipal bond quoted on a 6.5% basis. Which of the following is correct?

I. 6% is the bond's coupon.
II. 6% is the bond's current yield.
III. 6.5% is the bond's yield to maturity.
IV. 6.5% is the bond's current yield.
I and III
Which of the following is an unsecured debt instrument?
Aaa/AAA-rated debentures
The two classifications of chapters for corporate bankruptcies are

I. liquidations.
II. reorganizations.
III. bankruptcy.
IV. failures.
I and II
A bond that is structured so that the principal of the whole issue matures at once is
a term bond
An investor has purchased bonds having a put feature attached. With this put feature, it is likely that these bonds were issued with
a lower coupon than similar bonds without the feature
With money market securities held in one's portfolio, relative to other, longer-term debt securities, an investor should expect
a higher degree of safety with lower returns
The current yield on a bond with a coupon (nominal) rate of 7.5% currently selling at 105½ is approximately
7.1%
A bond has a 7% coupon and is currently offered at a price of 102. Which of the following yields could be the yield to maturity (YTM) for this bond?
6.55%
T-bills are issued (auctioned) by the U.S. Treasury Department how often?
Weekly
Which of the following projects would be funded by general obligation (GO) bonds?
Public Schools
6% XYZ debentures are trading for $1,200 while similarly rated bonds are being offered at 4.5%. What is the current yield on the 6% XYZ debentures?
5%
Each of the following makes regular interest payments except
Treasury STRIPS
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