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Course Catalog
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Funds
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400
Funds 406:
Using Quirky Bond Funds
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.
Bank loan funds have high _______ risk.
Choose wisely. There is only one correct answer.
Credit
Interest rate
Inflation
Credit. Because the loans come from lower-quality borrowers, the credit risk is elevated.
2.
Why do high-yield bonds offer such high income?
Choose wisely. There is only one correct answer.
They have high credit risk
They have high interest rate risk
They have high principal amounts
All of the above
They have high credit risk. These bonds offer high yields to compensate for the fact that they are big credit risks.
3.
Treasury inflation-protected securities are issued by _______.
Choose wisely. There is only one correct answer.
Private companies
Banks
The U.S. government
The U.S. government. Because they are issued by Uncle Sam, they are considered very safe.
4.
Why do bank loan funds have high credit risk?
Choose wisely. There is only one correct answer.
Bank loans by nature have high credit risk
The loans in the funds are from low-quality companies
Because of their high principal amounts
None of the above
The loans in the funds are from low-quality companies. Low-quality companies typically carry high risk of default.
5.
How do bank loan funds' fees compare to the fees of the average bond fund?
Choose wisely. There is only one correct answer.
They are higher
They are lower
They are about the same
They are higher. Compared to the average bond fund, their fees are higher.
Submit
DONE
