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Bonds 103: Buying Bonds

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1.
The price you pay for a new bond issue is called its _______.
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Offering price. Markups and commissions are fees you pay to dealers and brokers, respectively.
2.
The highest credit rating a bond can receive is _______.
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AAA. AAA is the highest credit mark a bond can receive.
3.
Buying diversified bond mutual funds has more risk than buying a few bonds individually.
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False. Because diversified bond funds contain many different kinds of bonds, they tend to have less risk than small groups of individual bonds.
4.
New US Treasury bonds are offered only four times a year.
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True. You can only buy bonds directly from the Federal Reserve during the first half of February, May, August, and November.
5.
The face value of a bond is known as its _______.
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Par. In bond language, par means face value.