Question 1

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

Accepted Answer

A)   certified
B)   coupon
C)   registered
D)   zero-coupon
E)   general obligationF) A) and B)
G) C) and D)

Question 2

Which ranks bonds from lowest to highest risk?

Accepted Answer

A)   Federal marketable bonds,corporate bonds,provincial bonds
B)   Canada savings bonds,municipal bonds,provincial bonds
C)   Canada savings bonds,provincial bonds,federal marketable bonds
D)   Provincial bonds,municipal bonds,corporate bonds
E)   Provincial bonds,Canada saving bonds,corporate bondsF) B) and C)
G) A) and B)

Question 3

A bond that is unsecured is called a(n)

Accepted Answer

A)   treasury bond.
B)   savings bond.
C)   junk bond.
D)   debenture.
E)   debt bond.F) C) and E)
G) B) and C)

Question 4

Sarah Peterson has been thinking about investing in corporate bonds.She is concerned about safety and wants the most secure bond investment possible.She would most likely invest in ____________ bonds.

Accepted Answer

A)   debenture
B)   subordinated.
C)   indenture
D)   convertible
E)   mortgageF) A) and D)
G) B) and C)

Question 5

If a bond was quoted in the newspaper at 75,the price in dollars was:

Accepted Answer

A)   $7.50
B)   $75
C)   $750
D)   $1,000
E)   $1,075F) A) and B)
G) A) and C)

Question 6

A convertible bond is a bond that can be exchanged,at the owner's option,for a specified number of shares of the corporation's common stock.

Accepted Answer

A) True 
 B)False

Question 7

You are trying to evaluate two bond issues.One bond issue is rated "A" by the DBRS; the other is rated "B." How important are the bond ratings issued by the DBRS and CBRS? Based on your answer,would you purchase the "A" bond or the "B" bond?

Accepted Answer

To determine the quality and risk associ...

Question 8

A warrant is an option that is detachable from the associated bond that gives the holder the right to purchase the firms common shares.

Accepted Answer

A) True 
 B)False

Question 9

A bond with a price quotation of 100 sells for $100.

Accepted Answer

A) True 
 B)False

Question 10

If overall interest rates in the economy rise,a corporate bond with a fixed interest rate will generally

Accepted Answer

A)   decrease in value.
B)   increase in value.
C)   remain unchanged.
D)   become worthless.
E)   be returned to the corporation.F) B) and E)
G) A) and E)

Question 11

Which of the following differentiates a bond from a GIC? I.Only bonds are subject to price risk.
II) Only bonds can generate a capital gain.
III) Only bonds are marketable securities.

Accepted Answer

A)   I and II,only
B)   II and III,only
C)   I and III only
D)   I,II and III
E)   I onlyF) None of the above
G) A) and E)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The Canada Savings Bond Payroll Program does not allow you to save through regular payroll deductions.

Accepted Answer

A) True 
 B)False

Question 14

The legal conditions for a corporate bond are described in the:

Accepted Answer

A)   bond indenture.
B)   bondholder's covenant.
C)   corporate charter.
D)   trustee contract.
E)   bond debenture.F) A) and C)
G) B) and D)

Question 15

The dollar amount repaid at maturity on a bond is referred to as its _________________.

Accepted Answer

A)   Face value
B)   market value
C)   coupon payment
D)   capital gain
E)   future valueF) A) and C)
G) A) and B)

Question 16

How do interest rates in the economy affect the price of a corporate bond? Give a numerical example.

Accepted Answer

All bonds are issued with a stated face ...

Question 17

Generally,interest on corporate bonds is paid every

Accepted Answer

A)   six months.
B)   three months.
C)   month.
D)   nine months.
E)   year.F) A) and D)
G) C) and D)

Question 18

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)   money
C)   debenture
D)   indenture
E)   sinkingF) None of the above
G) A) and B)

Question 19

Treasury bills are:

Accepted Answer

A)   discounted securities sold by the government of Canada
B)   discounted securities sold by corporations
C)   regular interest bonds
D)   compound interest bonds
E)   simple-interest bondsF) C) and D)
G) A) and D)

Question 20

Bonds of a single issue that mature on different dates are called ____________ bonds.

Accepted Answer

A)   debenture
B)   mortgage
C)   sinking fund
D)   subordinate
E)   serialF) A) and E)
G) B) and C)

Exam 12: Investing in Stocks

Sarah Peterson has been thinking about investing in corporate bonds.She is concerned about safety and wants the most secure bond investment possible.She would most likely invest in ____________ bonds.

Correct AnswerverifiedShow Answer

Which of the following differentiates a bond from a GIC? I.Only bonds are subject to price risk. II) Only bonds can generate a capital gain. III) Only bonds are marketable securities.

Correct AnswerverifiedShow Answer

If a bond was quoted in the newspaper at 75,the price in dollars was:

Correct AnswerverifiedShow Answer

A bond that is unsecured is called a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A convertible bond is a bond that can be exchanged,at the owner's option,for a specified number of shares of the corporation's common stock.

Correct AnswerverifiedShow Answer

Treasury bills are:

Correct AnswerverifiedShow Answer

The dollar amount repaid at maturity on a bond is referred to as its _________________.

Correct AnswerverifiedShow Answer

Generally,interest on corporate bonds is paid every

Correct AnswerverifiedShow Answer

How do interest rates in the economy affect the price of a corporate bond? Give a numerical example.

Correct AnswerverifiedAll bonds are issued with a stated face ...View AnswerShow Answer

You are trying to evaluate two bond issues.One bond issue is rated "A" by the DBRS; the other is rated "B." How important are the bond ratings issued by the DBRS and CBRS? Based on your answer,would you purchase the "A" bond or the "B" bond?

Correct AnswerverifiedTo determine the quality and risk associ...View AnswerShow Answer

Which ranks bonds from lowest to highest risk?

Correct AnswerverifiedShow Answer

A bond with a price quotation of 100 sells for $100.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Bonds of a single issue that mature on different dates are called ____________ bonds.

Correct AnswerverifiedShow Answer

If overall interest rates in the economy rise,a corporate bond with a fixed interest rate will generally

Correct AnswerverifiedShow Answer

The Canada Savings Bond Payroll Program does not allow you to save through regular payroll deductions.

Correct AnswerverifiedShow Answer

The legal conditions for a corporate bond are described in the:

Correct AnswerverifiedShow Answer

A warrant is an option that is detachable from the associated bond that gives the holder the right to purchase the firms common shares.

Correct AnswerverifiedShow Answer

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All bonds are issued with a stated face ...
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To determine the quality and risk associ...
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