Income Beginner:
Buying Bonds
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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1.
If a bond cannot be redeemed until its maturity date, it is considered to be callable.
Choose wisely. There is only one correct answer.
True
False
False. Bonds that can be paid back before their maturity date are callable.
2.
Most bonds are sold through _______.
Choose wisely. There is only one correct answer.
The Federal Reserve
The over-the-counter market
Stock exchanges
The over-the-counter market. This market includes the NASDAQ and is the principal venue for selling bonds.
3.
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.
4.
The more bonds you buy in one sale, the less you will pay in markup costs.
Choose wisely. There is only one correct answer.
True
False
True. Markups are generally lower for large sales than for small ones.
5.
Bonds in a unit investment trust remain fixed for the life of the trust.
Choose wisely. There is only one correct answer.
True
False
True. The bonds in the trust remain fixed.
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DONE