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Course Catalog
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Bonds
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100
Bonds 107:
Secured and Unsecured Bonds
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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Review your answers below to learn more.
1.
What is a debenture?
Choose wisely. There is only one correct answer.
A bond without collateral behind it
A high-yield bond
A secured bond
A corporate bond
A bond without collateral behind it. Some pay high yields, and many are sold by corporations, but all of them lack collateral.
2.
The collateral behind a railroad car purchase may be the railroad car itself.
Choose wisely. There is only one correct answer.
True
False
True. Railroads commonly sell equipment trust certificates to buy new equipment. Sometimes, the collateral is the item that was bought.
3.
Although unsecured bonds have no backing, they are protected from default by a promise to pay.
Choose wisely. There is only one correct answer.
True
False
True. This promise is called "full faith and credit," and many corporations and government units with good credit use it.
4.
Mortgage bonds are backed by _______.
Choose wisely. There is only one correct answer.
Revenue
Real estate
Taxes
Real estate. That is why they are called mortgage bonds.
5.
Which bond's interest and principal can be repaid by the US government?
Choose wisely. There is only one correct answer.
Treasury bond
General obligation bond
Municipal bond
None of the above
Treasury bond. The US Treasury sells its own bonds.
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DONE