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Additional Bond Courses Intermediate: Bond Discounts and Premiums

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1.
The original price you pay for a discount or premium bond is called its basis.
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True. This has important implications when it comes time to pay taxes.
2.
The time at which a bond is scheduled to be paid back is known as its _______.
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Maturity. Though maturity is the length of time the bond is held, it is also the date on which it is repaid.
3.
When interest rates go up, _______.
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New bonds and older bonds have equal yields-to-maturity. This is true even though their coupon rates are different.
4.
Buying a discount bond means you will receive less than the bond's face value at maturity.
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False. You will always receive the bond's face value at maturity, but you will buy it for less than the face value.
5.
Which is not true about zero coupon bonds?
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They are less affected by interest rates than regular coupon bonds. Zeros are more susceptible to interest rate changes than coupon-paying bonds.
DONE
Introduction to Bond Discounts and Premiums Basics of Bond Pricing Bond Discounts and Premiums Factors Affecting Bond Prices Zeros: The Ultimate Discount Bonds Special Tax Consequences of Discount and Premium Bonds Summary of Bond Discounts and Premiums Find out what you learned