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1.
A discount bond _______.
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Sells below face value. When its price is below its face value, it is known as a discount bond.
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.
US Treasury bonds bought over the counter have no transaction costs.
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False. Treasury bonds bought over the counter may have a small, additional flat fee.
4.
The highest credit rating a bond can receive is _______.
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AAA. AAA is the highest credit mark a bond can receive.
5.
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.