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- Which of the following types of debt securities protect investors against interest rate risk? a. extendible notes b. floating rate bonds c. floating rate bonds and extendible notes d. original issue deep discount bondsThese bonds were rated AA2 by S&P. Would you consider them investment-grade or junk bonds?Which of the following apply to bonds? Select all the apply a. Earns gains from dividends b. Earns gains from interest c. Prices are determined by present value d. Prices are determined by supply and demand e. Have primary and secondary markets f. Have primary markets only
- Bonds that are rated less than investment grade by bond-rating agencies is: a. Sovereign bonds b. Corporate bonds c. Junk bonds d. Contingency bonds1. Types of bonds Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities in which a borrower promises to pay a specified interest rate and principal at a future date. A. Which of the following statements about Treasury bonds is the most accurate? Treasury bonds have a very small amount of default risk, so they are not completely riskless. Treasury bonds are completely riskless. Treasury bonds are not completely riskless, since their prices will decline when interest rates rise. B. Based on the information given in the following statement, answer the questions that follow: In July 2009, Hungary successfully issued 1 billion euros in bonds. The transaction was managed by Citigroup. Who is the issuer of the bonds? The Hungarian government Hungary Bank Citigroup C. What type of bonds are these? Municipal bonds Corporate bonds Government bondsWhich of the following is correct? a. The terms, “yield rate”, “ stated rate”, and “market rate” are generally interchangeable when referring to interest on bonds. b. The yield or effective interest rate on a bond is equal to the stated rate if the bond premium or discount is amortized by using the straight-line method. c. Interest revenue and expense related to bonds are always computed using the stated rate of interest. d. If a bond is sold at its face amount, the stated and effective interest rates are the same.
- Bond A is a municipal bond and Bond B is a corporate bond. Which bond should have the lower yield to maturity? Select one: a. B b. A c. A=B. Distinguish between the following values relative to bonds payable: a. Maturity value. b. Face value. c. Market (fair) value. d. Par value.Which of the following fixed income securities has the highest level of risk? Which one has the highest level of liquidity? a. treasury bonds b. agency bonds c. corporate bonds d. municipal bonds
- Each bond differs with respect to risk and expected return. Differentiate between treasury bonds, corporate bonds, municipal bonds and foreign bonds.When the effective cost of debt is greater its the nominal cost, *a. The entity records a discount on the bond payable.b. the initial net measurement of the bond is more than the face value.c. The net proceeds is more than the face value.d. The interest expense is less than the interest payments.Which of the following statements concerning bonds is FALSE? A. Bonds can be issued either at par, premium, or discount. B. Bonds interest is tax deductible. C. Bondholders have voting rights. D. Bonds are usually considered to be a long term liability.