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Bonds 103: Buying Bonds

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1.
If a bond cannot be redeemed until its maturity date, it is considered to be callable.
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False. Bonds that can be paid back before their maturity date are callable.
2.
The more bonds you buy in one sale, the less you will pay in markup costs.
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True. Markups are generally lower for large sales than for small ones.
3.
New-issue bonds are bonds that are sold through the secondary market.
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False. New-issue bonds are purchased directly from the bond issuer.
4.
A discount bond _______.
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Sells below face value. When its price is below its face value, it is known as a discount bond.
5.
A bond unit investment trust is an actively managed portfolio of bonds.
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False. A unit investment trust is managed, and is a fixed portfolio of securities.