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Additional Bond Courses Intermediate: Bond Quotes

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1.
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.
2.
Treasury bills bear no interest because they are sold at discounts.
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True. Treasury bills are sold for discounts at yield auctions.
3.
When resold in the secondary market, the price of a corporate bond is quoted _______.
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As a percentage of its par value. When resold in the secondary market, corporate bond prices are quoted as a percentage of par value (face value). This quoted price, which may be a premium or a discount, is made up of a number of components.
4.
A Treasury bond quote of 95.12 is equal to which of the following?
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$953.75. The "95" represents 95 points, and each point is worth $10. So, 95 x $10 = $950. The "12" represents 12/32nds of a point ($10), or $3.75. Add them together and you get $953.75.
5.
Zero coupon bonds got their name because they pay no periodic interest.
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True. Issued by private sector corporations and by the federal government, zero coupon bonds make no periodic interest payments to the bondholders. Instead, they are sold at deep discounts and mature at their full face values many years later.
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.
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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