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.
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.
2.
The time at which you are paid back for a bond is known as its _______.
Choose wisely. There is only one correct answer.
Maturity. A bond's maturity is the date upon which the investor's money is repaid by the issuer.
3.
New US Treasury bonds are offered only four times a year.
Choose wisely. There is only one correct answer.
True. You can only buy bonds directly from the Federal Reserve during the first half of February, May, August, and November.
4.
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.
5.
The coupon rate is the amount of interest paid on a bond's premium.
Choose wisely. There is only one correct answer.
False. The coupon rate is the amount of interest paid on a bond's par.