Personal Finance Study Set 15

Business

Quiz 15 :

Investing in Bonds

Quiz 15 :

Investing in Bonds

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A sinking fund is a fund to which deposits are made each year for the purpose of redeeming a bond issue.
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True False
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True

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

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Treasury bills are issued in minimum units of $10,000 with maturities that range from 10 to 30 years.
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True False
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False

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The only way an investor can make money on a bond investment is to hold the bond until maturity.
True False
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A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest.
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Professional management spells safety,because an occasional loss incurred with one bond issue is usually offset by gains from other bond issues in the fund's portfolio.
True False
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Treasury notes are issued in $100 units with a maturity of more than 1 year but not more than 10 years.
True False
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Interest checks for registered bonds are generally mailed directly to the bondholder of record.
True False
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A convertible bond is a bond that can be exchanged,at the holder's option,for a specified number of shares of the corporation's common stock.
True False
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A bond debenture is a legal document that details all of the conditions relating to a bond issue.
True False
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Maturity dates for corporate bonds generally range from 1 to 10 years.
True False
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In reality,there is no guarantee that convertible bondholders will convert to common stock even if the price of the common stock does increase.
True False
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Many financial experts recommend bond funds for very large investors,because these investments offer diversification and professional management.
True False
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Although unpopular a few years back,more and more U.S.corporations are issuing bearer bonds.
True False
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A registered bond is a bond whose ownership is listed in the owner's name by the issuing company.
True False
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With the use of technology and computers,the book entry form of bond ownership is no longer used.
True False
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A subordinated debenture is a more secure investment than a mortgage bond.
True False
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A mortgage bond is a corporate bond that is secured by various assets of the issuing firm.
True False
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Because bonds are considered debt financing that must be repaid at maturity,a corporation's financial difficulties have little effect on the bond's value between the issue date and the maturity date.
True False
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Bond interest payments are a tax-deductible expense for a corporation.
True False
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