Recent Lessons

Show all results for ""

Feature Overview

Ace your exams with our all-in-one platform for creating and sharing quizzes and tests.

Quizzes

Create quizzes and tests automatically from your content using AI.

Flashcards

Automatically turn your notes into digital flashcards.

Share, Export & Embed

Share with classmates or export to Excel and your learning management system.

Stats & Reporting

Auto-grading quizzes and tests with detailed stats and reports.

Mobile Apps

The smarter way to study – wherever you are.

Pricing

Search...

18 Questions

2 Views

Bond Risks and Investment

Choose a study mode

Play Quiz

Study Flashcards

Spaced Repetition

Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the purpose of the issue price of a bond?

To decide whether the bond is callable

To set the bond's maturity date

To indicate the original sale price of the bond (correct)

To determine the bond's coupon rate

What is the main difference between secured and unsecured bonds?

The interest rate offered

The issuer's credit rating

The collateral backing the bond (correct)

The bond's maturity date

What is the benefit of a callable bond to the issuer?

The guarantee of a specific return on investment

The ability to change the bond's coupon rate

The ability to issue more bonds

The option to pay off the bond early at a premium (correct)

What is the primary advantage of secured bonds over unsecured bonds?

Lower risk due to collateral Signup and view all the answers

What is a mortgaged-backed security an example of?

Secured bond Signup and view all the answers

Why might an issuer choose to call its bonds?

To issue new bonds at a lower interest rate Signup and view all the answers

What type of bond is secured by a mortgage on real properties?

Mortgage bond Signup and view all the answers

Which type of bond does not have collateral security?

Debenture bond Signup and view all the answers

What type of bond can be exchanged for shares of the issuing entity?

Convertible bond Signup and view all the answers

Which type of bond has a single date of maturity?

Term bond Signup and view all the answers

What type of bond is unregistered in the sense that the name of the bondholder is not recorded on the company books?

Coupon or bearer bond Signup and view all the answers

Which type of bond has a series of maturity dates instead of a single one?

Serial bond Signup and view all the answers

Why do companies issue debt instead of equity?

To avoid diluting ownership and potentially earn more from the funds than the cost of interest Signup and view all the answers

What is the main characteristic of public bonds?

They are sold to individuals and financial institutions Signup and view all the answers

What is the obligation of the issuer in a bond issue?

To pay a fixed amount of interest periodically and repay a fixed amount of principal at the date of maturity Signup and view all the answers

How often are interest payments usually made on bonds?

Every six months Signup and view all the answers

What is the term used to describe the public debt market based on the issue's maturity?

Money Market, Notes, and Bonds Signup and view all the answers

What is the main difference between notes and bonds?

Notes have maturities in excess of 1 year but less than 10 years, while bonds have maturities in excess of 10 years Signup and view all the answers