Income Beginner: Buying Bonds

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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.
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.
3.
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.
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 highest credit rating a bond can receive is _______.
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AAA. AAA is the highest credit mark a bond can receive.