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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.
Choose wisely. There is only one correct answer.
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.
Choose wisely. There is only one correct answer.
True. Markups are generally lower for large sales than for small ones.
3.
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.
4.
New US Treasury bonds are offered only four times a year.
Choose wisely. There is only one correct answer.
True. You can only buy bonds directly from the Federal Reserve during the first half of February, May, August, and November.
5.
Buying diversified bond mutual funds has more risk than buying a few bonds individually.
Choose wisely. There is only one correct answer.
False. Because diversified bond funds contain many different kinds of bonds, they tend to have less risk than small groups of individual bonds.