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.
New-issue bonds are bonds that are sold through the secondary market.
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False. New-issue bonds are purchased directly from the bond issuer.
3.
If a bond cannot be redeemed until its maturity date, it is considered to be callable.
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False. Bonds that can be paid back before their maturity date are callable.
4.
Buying diversified bond mutual funds has more risk than buying a few bonds individually.
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False. Because diversified bond funds contain many different kinds of bonds, they tend to have less risk than small groups of individual bonds.
5.
The more bonds you buy in one sale, the less you will pay in markup costs.
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True. Markups are generally lower for large sales than for small ones.