Income Beginner: Buying Bonds

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1.
The coupon rate is the amount of interest paid on a bond's premium.
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False. The coupon rate is the amount of interest paid on a bond's par.
2.
The highest credit rating a bond can receive is _______.
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AAA. AAA is the highest credit mark a bond can receive.
3.
A bond unit investment trust is an actively managed portfolio of bonds.
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False. A unit investment trust is managed, and is a fixed portfolio of securities.
4.
Most bonds are sold through _______.
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The over-the-counter market. This market includes the NASDAQ and is the principal venue for selling bonds.
5.
The price you pay for a new bond issue is called its _______.
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Offering price. Markups and commissions are fees you pay to dealers and brokers, respectively.