Income Beginner: Buying Bonds

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
The price you pay for a new bond issue is called its _______.
Choose wisely. There is only one correct answer.
Offering price. Markups and commissions are fees you pay to dealers and brokers, respectively.
2.
The highest credit rating a bond can receive is _______.
Choose wisely. There is only one correct answer.
AAA. AAA is the highest credit mark a bond can receive.
3.
Most bonds are sold through _______.
Choose wisely. There is only one correct answer.
The over-the-counter market. This market includes the NASDAQ and is the principal venue for selling bonds.
4.
The face value of a bond is known as its _______.
Choose wisely. There is only one correct answer.
Par. In bond language, par means face value.
5.
Buying diversified bond mutual funds has more risk than buying a few bonds individually.
Choose wisely. There is only one correct answer.
False. Because diversified bond funds contain many different kinds of bonds, they tend to have less risk than small groups of individual bonds.