Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Most municipal bonds are free of _______ on distributions of interest.
Federal tax. They are also free of state and local taxes in the states in which they are issued. However, if you own one from one state but you live in another, you will owe state and/or local taxes on it.
2.
Generally, the longer the maturity on a CD, the higher the interest rate.
True. High interest rates are a way of rewarding investors for leaving their money invested for long periods.
3.
When a bond is called back by the company, it is done so at the _______.
Call price. This is the price at which it the holder must redeem the bond.
4.
What is the actual price of a government bond quoted at 92.4?
$921.25. Government bonds are quoted as parts of $100. The 92 means $920. Amounts less than 1 are quoted in 32nds. Thus, the .4 in the quote means 4/32, which is $1.25. The quote works out to $920 + $1.25 = $921.25.
5.
You can buy a savings bond for as little as _______.
$25. This is the minimum amount; it increases by the penny.
6.
What is sold on the money market?
Short-term debt securities. Money market investments are short-term. That is their distinguishing feature.