Bonds Quizzes - E-PersonalFinance

What initials are used by Moody's to show the lowest quality of rated bonds?

(a) Aaa (b) A (c) Ca (d) C

A zero coupon bond:

(a) Pays no current interest (b) Is guaranteed by the FDIC (c) Fluctuates in value based on the GNP (d) Has adverse tax consequences for individuals

When purchasing a corporate bond:

(a) Investors receive tax free dividends (b) Investors receive tax free interest payments (c) Investors are making a loan to the company (d) Investors share in the upside of the value of the business

A bond issued by a company in one country and sold on the exchange in another country is called a:

(a) Global bond (b) Exchange bond (c) ETF (d) GIC

A municipal bond that is backed by the issuing municipality's power to tax and by its ability to borrow money is called a:

(a) Structured bond (b) High yield bond (c) General obligation bond (d) IMM Bond

Bonds whose interest is paid through the issuance of additional bonds are called:

(a) Pay in kind bonds (b) No load bonds (c) Zero coupon bonds (d) Fully amortized bonds

Corporate bonds:

(a) Result in tax free interest to the holder (b) Generally pay higher interest rates than federal or muni bonds (c) Dilute the equity of the company (d) Proceeds can not be used for acquisitions by the company

The securities document that describes the offering of a municipal security, the issuer of the security and the risk factors is called a:

(a) Registration Statement (b) Prospectus (c) Official Statement (d) Accredited Investor Information Statement

Why do municipal bonds appeal to investors in high tax brackets?

(a) Tax on the interest earned is deferred until retirement (b) Income from most municipal bonds is tax exempt (c) They can fluctuate greatly in value (d) They are guaranteed by the federal government

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