Income Beginner:
Buying Bonds
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1.
A discount bond _______.
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Sells above face value
Sells below face value
Neither of the above
Sells below face value. When its price is below its face value, it is known as a discount bond.
2.
Bonds in a unit investment trust remain fixed for the life of the trust.
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True
False
True. The bonds in the trust remain fixed.
3.
US Treasury bonds bought over the counter have no transaction costs.
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True
False
False. Treasury bonds bought over the counter may have a small, additional flat fee.
4.
New US Treasury bonds are offered only four times a year.
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True
False
True. You can only buy bonds directly from the Federal Reserve during the first half of February, May, August, and November.
5.
The time at which you are paid back for a bond is known as its _______.
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Value
Yield
Maturity
Maturity. A bond's maturity is the date upon which the investor's money is repaid by the issuer.
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DONE