FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 15: Investing in Bonds

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Not Answered

Review LaterAdd Note

Review Later

You are trying to evaluate two bond issues. One bond issue is rated "A" by Moody's; the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback, would you purchase the "A" bond or the "B" bond?

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following can cause a bond investor to lose money?

A) Selling a bond prior to maturity and at a time when the market interest rate exceeds the bond's interest rate
B) Converting a bond into shares of common stock that have a lesser combined value and immediately selling those shares
C) By the issuer going out of business when there are insufficient assets to pay the bondholders
D) By the issuer defaulting
E) All of these circumstances can cause a bond investor to lose money.

Correct Answer

verified

Show Answer

Question 43

True/False

Review LaterAdd Note

Because of higher interest rates, zero-coupon bonds are sold at a premium price above the face value that will be paid at maturity.

A mortgage bond is a corporate bond that is secured by various assets of the issuing firm.

The current yield for a bond is determined by dividing the annual income amount by which of the following:

For Moody's and Standard & Poor's, the first four individual bond-rating categories represent investment-grade securities.

A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest.

Bond interest is typically paid:

A bond that is listed in the owner's name by the issuing company is called a ______________ bond.

You are a taxpayer in the 28 percent tax bracket and you own a tax-exempt bond that pays 5 percent. What is your taxable equivalent yield?

A corporate bond that is secured by various assets of the issuing firm is called a(n) ____________ bond.

Which of the following assets owned by a company can be used to secure a mortgage bond?

Bonds are generally considered a relatively safe investment. How is it possible to lose money on bonds?

Dave Harris purchased a single bond last year for $987. He knows he will receive $1,000 on March 1, 2026. This date is referred to as the ____ date.

Which one of the following statements is correct?

Although there is a great deal of information on the internet about stock investments, it is impossible to evaluate bonds using the internet.

For Moody's and Standard & Poor's, the first _____ individual bond-rating categories represent investment-grade securities.

If a bond is quoted in the newspaper at 88.75, the current price of a $1,000 face value bond is:

Which type of bond is not registered in the investor's name?

A bond backed by the full faith, credit, and unlimited taxing power of the municipality that issued it is called a ____________ bond.