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Additional Bond Courses Intermediate: Bond Quotes

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1.
Treasury zeros are created by _______.
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Brokerage houses operating in the secondary market. Treasury zeros are created when brokerage firms package them in the secondary market by stripping the coupons away from the principals, bundling all coupons together in one pool and all principal in another pool.
2.
In the secondary market, the quoted price of a Treasury bond is made up of all of the following components except _______.
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The current inflation rate. The quoted price is made up of such components as the fixed interest rate stated on the bond, current interest rates at the time of sale, the time remaining until maturity, and the call date (if applicable). However, the inflation rate has no bearing.
3.
Compared to other debt issues, corporate bonds are _______.
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The most speculative. Of all debt issues, corporate bonds are the most speculative; however, their relative risk can vary considerably from one issuer to the next.
4.
The minimum face value of a US Treasury bill is $1,000.
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False. Treasury bills have a minimum face value of $10,000.
5.
Unlike most securities, bonds have an unlimited life span.
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False. Bonds exist for a finite period of time, after which they are bought back by the issuer at maturity.
6.
Municipal bonds are generally considered safer than Treasury bonds.
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False. Although municipalities can back their bonds through their legal right to collect taxes, municipal bonds are not considered as safe as Treasury issues, which have the full backing of the US government.
Introduction to Bond Quotes How Bonds Are Quoted Treasury Bill Quotes Treasury Bond Quotes Municipal Bond Quotes Corporate Bond Quotes Zero Coupon Bond Quotes Summary of Bond Quotes Find out what you learned