DEBT SIE
Treasury Bills
Pay interest in maturity. Less then year Short term issued weekly. Pay semiannually T+1 Purchased at discount
Treasurys are always issued:
book entry
How do zero coupons pay interest and how are they taxed? Pays annually Pays at maturity Taxed annually Taxed at maturity A)I and III B)I and IV C)II and III D)II and IV
c
Premium
issuer pays bondholder to exercise call
The last quotation of a U.S. government bond is 98.08. An investor purchasing the bond would pay:
$982.50 Bonds are quoted at par in 32nds. 980 +8/32 =2.50 982.50
A call feature attached to a bond allows A)an issuer to call in a bond before maturity at times that will benefit the issuer. B)a bondholder to call the issuer for a redemption before the maturity date. C)an issuer to call in a bond before maturity at times that will benefit the bondholder. D)a bondholder to hold a bond beyond the maturity date benefitting the bondholder.
A
A maturity schedule that has relatively equal portion of the issue maturing at regular intervals over a multiyear period most likely has which type of bond? A)Serial bond B)Balloon bond C)Series bond D)Term bond
A
For a corporate bond, once issued, nominal yield A)does not change in response to interest rate movements. B)moves in the same direction as current interest rates. C)will always be equal to current yield. D)has an inverse relationship to current interest rate movements.
A
When purchasing a bond, the investor is taking on A)a creditor position. B)an equity position. C)a debtor position. D)an obligation.
A
When selling a bond, the issuer is taking A)a borrower's position. B)a loaners position. C)a creditors position. D)an equity position.
A
Which of the following statements is true of income bonds? A)Unlike other bonds, they don't pay income unless declared by the board of directors. B)Unlike other bonds, they pay income monthly. C)Unlike other bonds, they pay income quarterly. D)Unlike other bonds, they pay income annually.
A
Which of the following statements regarding put and call features on debt securities is correct? A)Put features benefit the bondholder. B)A putable bond is likely to be put back when interest rates are falling. C)A callable bond is likely to be called when interest rates are rising. D)Call features benefit the bondholder.
A
A corporation deposits 20-year Treasury bonds into a trust in order to secure a loan. The loan for this type of arrangement would be facilitated by the corporation issuing A)equipment trust certificates. B)collateral trust bonds. C)Treasury guaranteed bonds. D)mortgage bonds.
B
A corporation has issued debt securities backed by the shares of another corporation that it owns. These debt securities are known as A)equipment trust certificates. B)collateral trust bonds. C)debentures. D)mortgage bonds.
B
A court has ordered a corporation to liquidate all assets under a federal bankruptcy proceeding. Which of the following is true? A)There is no priority for the payment of wages to employees. B)Debtholders are paid before stockholders. C)Common stockholders are paid before preferred stockholders. D)Preferred stockholders are paid before debtholders.
B
Bondholders should expect that interest payments would always be forthcoming for all of the following except A)debentures. B)income bonds. C)convertible bonds. D)subordinated debentures.
B
Regarding bankruptcy proceedings, A)liquidation of assets must occur first before the courts can offer protection from creditors. B)courts protect both corporate and individual filers from creditors. C)the procedure is only available to individuals seeking protection from creditors and not business entities. D)a plan for reorganization must be submitted first before the courts can offer protection from creditors.
B
Which of the following corporate bonds is backed by the securities of other corporations or those of a subsidiary? A)Equipment trust certificate B)Collateral trust bond C)Mortgage bond D)Debenture
B
Shortest to longest maturity
Bills, notes, bonds
A U.S. government bond quoted at 94.20 - 95.08 has a bid price of..
Bonds are quoted at $1,000 par in 32nds, with each point worth $10. The bid price (the first price listed) would be $940 + (20/32 X $10), which converts to $940 + $6.25 for a price of $946.25.
A balloon maturity for an issuer's debt securities is most accurately described as A)a serial issue of bonds on which the interest rate periodically changes over the life of the issue for all bonds remaining outstanding. B)an obligation granting the bondholder the right to require the issuer to purchase the bonds at par at a certain time before maturity. C)a later final maturity within a serial issue of bonds that contains a disproportionately large percentage of the principal amount of the original issue. D)bonds comprising all of a particular issue that come due in a single maturity.
C
For collateral trust bonds, all of the following are true except A)securities backing the debt can be securities of either fully or partially owned subsidiaries. B)the issuer deposits securities it owns into a trust. C)these are unsecured debt securities. D)a trust serves as a depository holding the securities to serve as collateral.
C
If a company files for bankruptcy, which of the following investors would be most likely to be paid first? A)Debentures B)Preferred stock C)Mortgage bonds D)Common stock
C
Income from an investment in debt securities is known as A)total return. B)capital gains. C)interest. D)dividends.
C
List the order of payment from first to last in the event of a corporate liquidation. I.Secured debt II.Preferred shareholders III.Unsecured debt IV.Common shareholders A)I, II, IV, III B)II, IV, III, I C)I, III, II, IV D)II, I, IV, II
C
Once issued, a corporate bond's current yield A)does not change in response to interest rate movements. B)has an inverse relationship to current interest rate movements. C)moves in the same direction as current interest rates. D)will always be equal to current yield.
C
The coupon on a bond can be described as its A)current yield. B)yield to call. C)nominal yield. D)basis yield.
C
The coupon rate on a debt security represents A)the principal amount due to the investor at maturity. B)the interest rate the investor has agreed to pay the issuer. C)the interest rate the issuer has agreed to pay the investor. D)the principal amount loaned to the issuer.
C
An investor purchases a bond at $900 with a 5% coupon and a 5-year maturity. The bond has a current yield of A)4.5%. B)7.8%. C)5.6%. D)7.4%.
C Current yield is determined by dividing annual interest (coupon) payment by the current market price of the bond ($50 ÷ $900 = 5.6%). Years to maturity is not a factor in calculating current yield.
A guaranteed bond is A)a secured debt instrument. B)debt backed by another company, such as a subsidiary company. C)backed by physical assets of either a parent company or a subsidiary company. D)debt backed by another company, such as a parent company.
D
An issuer of bonds can be A)corporate entities only. B)corporates and municipal governments only. C)federal and municipal governments only. D)corporate and both the federal and municipal governments.
D
Regarding filing for corporate bankruptcy, which of the following is true? A)Reorganization can only occur after liquidation in a corporate bankruptcy filing. B)Reorganization means that property will be taken and sold to repay all debts. C)Reorganization does not allow for continued operations to occur. D)Liquidation means that property will be taken and sold to repay all debts.
D
The two classifications of chapters for corporate bankruptcies are liquidations. reorganizations. bankruptcy. failures. A)III and IV B)I and IV C)II and III D)I and II
D
To the benefit of the bondholder, a puttable bond is likely to be put back to the issuer when interest rates A)are volatile, moving both up and down over short periods of time. B)fall. C)remain stable for long periods of time. D)rise.
D
Retail investors can find info on municipal bonds on
EMMA
Treasury Notes
Priced at percentage of par. T+1 Intermediate 2-10 years
Treasury interest payments
Semiannually
Treasury Bonds
Settle T+1 Long term over 10 years. Priced at percentage of par.
Who obtains CUSIP?
Underwriters
Debenture
Unsecured corporate bond
Yield to call.. Yield to worst...
Yield to call - discount; Yield to worst - Premium
A brokerage firm places U.S. Treasury notes and bonds in a trust at a bank and then issues securities collateralized by either the principal or interest payments those notes and bonds represent. These new securities the broker-dealer is offering are A)Treasury receipts. B)Treasury bills. C)collateralized obligations. D)Treasury STRIPS.
a
A corporation wanting to raise cash to finance accounts receivable and seasonal inventory needs is likely to issue any of the following except A)bonds. B)promissory notes. C)prime paper. D)commercial paper.
a
A guaranteed bond is usually guaranteed by which of the following entities? A)A parent company B)The U.S. government C)The broker-dealer who sold it D)The U.S. Guarantee Association
a
All of the following securities are backed by the full faith and credit of the U.S. government except A)Treasury receipts. B)Treasury STRIPS. C)Treasury bonds. D)Treasury notes.
a
All of these are debt-security-maturity schedules except A)series. B)term. C)balloon. D)serial.
a
An investor pays 102 ($1,020) for a $1,000 par value bond. At maturity, A)the premium paid decreases the return. B)the discount received decreases the return. C)the premium paid increases the return. D)the discount received increases the return.
a
An unsecured promissory note issued by a bank that can be traded in the secondary market is known as A)a negotiable CD. B)prime paper. C)mortgage bond. D)commercial paper.
a
Federal, state, and local income tax would be due on the interest from which of the following issues? A)FHLMC certificate B)Tax anticipation note issued by Orlando, Florida C)Dallas, Texas, general obligation bond D)5-year TIP
a
Promissory notes are a form of A)commercial paper issued by corporations. B)jumbo CDs issued by banks. C)Treasury notes issued by the U.S. government. D)Treasury bills issued by the U.S. government.
a
STRIPS are delivered in A)book entry. B)bearer form. C)physical certificates. D)registered as to principal only form.
a
The BBB Corporation is liquidating under a Chapter 7 bankruptcy. What is the order of payout? A)Secured bondholders, senior bondholders, subordinated bondholders, and then common shareholders B)Common shareholders, preferred shareholders, general creditors, and senior bondholders C)Senior bondholders, preferred shareholders, common shareholders, and general creditors D)General creditors, senior bondholders, preferred shareholders, and common shareholders
a
Which of the following debt securities has interest that is subject to federal income tax but not state income tax? A)10-year STRIP B)30-year general obligation (GO) bond C)30-year revenue bond for a toll bridge D)30-year debenture
a
Which of the following is the most junior security? A)Preferred stock B)Subordinate debentures C)Collateral trust certificates D)Equipment trust certificates
a
Which of the following is true for U.S. Treasury-issued securities? A)T-bills are purchased at a discount, while T- bonds are purchased as a percentage of par. B)T-notes and T-bills pay interest annually. C)T-bills and T-bonds pay interest semiannually. D)T-notes are purchased at a discount to par, while T-bonds are purchased as a percentage of par.
a
Which of the following statements regarding put and call features on debt securities is correct? A)Put features benefit the bondholder. B)call features benefit the bondholder. C)A putable bond is likely to be put back when interest rates are falling. D)A callable bond is likely to be called when interest rates are rising.
a
A corporate bond has a stated yield set at the time of issuance. This stated yield is also known as A)the current yield. B)the coupon rate or nominal yield. C)the yield to call. D)the yield to maturity.
b
A customer has a short-term investment time horizon and a fairly certain need for funds she wishes to invest. Which of the following might meet those two investment objectives? A)Corporate bonds B)Money market instruments C)Common stock D)Government bonds
b
A customer has a short-term investment time horizon and a fairly certain need for funds she wishes to invest. Which of the following might meet those two investment objectives? A)Government bonds B)Money market instruments C)Corporate bonds D)Common stock
b
All of the following pay interest except A)GNMAs. B)T-bills. C)T-notes. D)T-bonds
b
An investor is able to purchase a bond at $725, well below par value. Buying the bond so cheaply tells us that the investors return at maturity A)decreases. B)increases. C)will be low, reflecting the low price paid. D)is unaffected.
b
Commercial paper is A)secured debt with a maximum maturity of one year. B)unsecured debt with a maximum maturity of nine months. C)unsecured debt with a maximum maturity of one year. D)secured debt with a maximum maturity of nine months.
b
Federal, state, and local income tax would be due on the interest from which of the following issues? A)Jersey City, New Jersey, general obligation bond B)FNMA certificate C)90-day Treasury bill D)Grant anticipation note issued by Ogden, Utah
b
For Treasury receipts and STRIPS, which of the following is true? A)Treasury receipts are backed in full by the U.S. government. Treasury STRIPS are not. B)Treasury STRIPS are backed in full by the U.S. government. Treasury receipts are not. C)Both Treasury receipts and STRIPS are backed in full by the U.S. government. D)Neither Treasury receipts or STRIPS are backed in full by the U.S. government.
b
In order to meet federal budget needs, the types and quantity of government securities to be issued are determined by A)the U. S. president and Congress. B)the U.S. Treasury Department. C)the chairman of the Federal Reserve Board. D)the Federal Reserve Board (FRB).
b
Money market instruments are typically A)equity securities with short- to intermediate-term maturities. B)fixed-income (debt) securities with short-term maturities. C)fixed-income (debt) securities with short- to intermediate-term maturities. D)equity securities with short-term maturities.
b
The United States Congress has authorized all of the following enterprises to issue securities except A)Government National Mortgage Association (GNMA). B)Federal Deposit Insurance Corporation (FDIC). C)Federal Home Loan Mortgage Corporation (FHLMC). D)Federal National Mortgage Association (FNMA).
b
Treasury bills (T-bills) are A)issued at a discount, with a stated interest rate paid annually. B)issued at a discount to par, paying interest at maturity. C)issued at face value, with all interest paid in monthly checks. D)issued at face value, with a stated rate of return received as interest annul
b
U.S. government deposits securities with a trustee against which certificates are sold representing principal only with no regular interest payments. These are known as A)Treasury notes. B)Treasury STRIPS. C)Treasury bonds. D)Treasury receipts.
b
Which of the following is not considered a money market instrument? A)Negotiable jumbo certificates of deposit (CDs) B)Money market funds C)Commercial paper D)Banker's acceptances (BAs)
b
Which of the following projects would most likely be funded with a revenue bond? A)A city hall B)Sports stadium C)A public school D)A county court house
b
Which of the following regarding capital and money markets is true? A)Money markets provide intermediate to long-term financing. B)Capital markets provide intermediate to long-term financing. C)Capital markets provide short-term financing. D)Money markets provide long-term financing.
b
Which of the following securities pays interest that is taxable at the federal level and tax free at the state level? A)FNMA B)Treasury bond C)GNMA D)Corporate bond issued from the customer's home state
b
Which of the following statements regarding Treasury receipts are true? Interest is paid annually. Interest is paid at maturity They are sold at a discount. They are sold at par. A)II and IV B)II and III C)I and III D)I and IV
b
Your customer is a resident of Las Vegas, Nevada. Which of the following debt issues would generate interest that would be taxable to your customer at the state level but not taxable at the federal level? A)Clark County, Nevada, general obligation bond B)Nevada City, California, Municipal Water District revenue bond C)GNMA certificate D)Las Vegas Hotels, Inc., debenture
b
A bond that is structured so that a portion of the principal is scheduled to mature at intervals over several years is A)a series bond. B)a term bond. C)a serial bond. D)a balloon bond.
c
Accrued interest on U.S. government bonds is calculated using A)actual days in each month and 360 days in each year. B)30 days in each month and 360 days in each year. C)actual days in each month and actual days in the year. D)30 days in each month and 365 days in each year.
c
All of the following are considered money market instruments except A)commercial paper. B)negotiable jumbo certificates of deposit (CD). C)American depositary receipts (ADRs). D)banker's acceptances (BAs).
c
An investor anticipates that a fall in interest rates is imminent. This investor, now wanting to purchase bonds in order to lock in interest income, would likely buy A)neither callable nor noncallable bonds. B)either callable or noncallable bonds. C)noncallable bonds. D)callable bonds.
c
An investor has purchased bonds having a put feature attached. With this put feature, it is likely that these bonds were issued with A)a higher coupon than similar bonds without the feature. B)a coupon that will be called away by the issuer before maturity. C)a lower coupon than similar bonds without the feature. D)a coupon that need not reflect the impact of the call featur
c
Distinguishing by the issue's term to maturity for those securities issued by the U.S. federal government, which of the following is correct? A)Notes represent long-term issues. B)Bonds and notes are both intermediate-term issues. C)bills represent short-term issues. D)Bonds represent intermediate-term issues.
c
Federal funds represent A) the amount the Federal Reserve Board (FRB) holds in reserve for its member banks. B) the amount of a bank's deposits required to be held on reserve at the Federal Reserve Board (FRB). C) the amount by which a bank exceeds its required deposits to be held on reserve at the Federal Reserve Board (FRB). D) the amount by which a bank falls short of its required deposits to be held on reserve at the Federal Reserve Board (FRB).
c
Federal, state, and local income tax would be due on the interest from which of the following issues? A)Los Angeles, California, general obligation bond B)5-year Treasury note C)GNMA certificate
c
Federal, state, and local income tax would be due on the interest from which of the following issues? A)3-year Treasury note B)grant anticipation note issued by Newark, New Jersey C)GNMA certificate D)San Francisco, California, general obligation bond
c
If a customer is interested in monthly income, which of the following securities would meet that need? A)Municipal revenue bonds B)Treasury notes C)Government National Mortgage Association certificates (GNMA) D)Federal National Mortgage Association (FNMA) bonds
c
In what order would claimants receive payment in the event of a corporate bankruptcy? Holders of secured debt Holders of subordinated debt instruments General creditors Preferred stockholders A)IV, I, II, III B)I, II, III, IV C)I, III, II, IV D)III, I, II, IV
c
Money market instruments can be associated with all of the following except A)nonvolatile and safe debt instruments. B)short-term debt instruments. C)high-yielding debt instruments. D)highly liquid debt instruments.
c
Money market securities can be associated with which of the following characteristics? A)High returns relative to the general debt market B)Long-term maturities C)Being highly liquid D)Making interest payments at regular intervals
c
Rank the following investors from lowest to highest priority in liquidation. A)Preferred stock, debentures, subordinate debentures, secured debt, common stock B)Debentures, secured debt, preferred stock, common stock, subordinated debt C)Common stock, preferred stock, subordinate debentures, debentures, secured debt D)Secured debt, debentures, subordinate debentures, preferred stock, common stock
c
Repurchase agreements and reverse repurchase agreements are A)long-term bonds. B)equity instruments. C)money market instruments. D)intermediate-term notes.
c
T-notes are the U.S. government's A)long-term debt of over 10 years. B)only callable debt. C)intermediate-term debt of 2-10 years. D)short-term debt of 1 year or less.
c
Treasury receipts are backed by A)the U.S. government as issuer of the collateral for the receipts. B)the trustee holding the collateral for the receipts. C)the issuing broker-dealer. D)the bank holding the T-notes and bonds backing the receipts.
c
Which of the debt issues listed here would produce taxable interest at all levels? A)General obligation bond issued by Puerto Rico B)General obligation bond issued by the County of San Francisco, California C)Government National Mortgage Association certificate fully backed by the Treasury D)90-day T-bill
c
Which of the following are securities representing other securities held on deposit with a trustee where the principal and interest payments have been separated? A)Treasury bills and notes B)Treasury notes and bonds C)Treasury receipts and STRIPS D)Treasury receipts, bills, and notes
c
Which of the following is an example of an unsecured debt security? Debenture Preferred stock Mortgage bond Income bond A)II and IV B)I and II C)I and IV D)I and III
c
Which of the following is the lowest investment grade debt rating? A)A B)BB C)BBB D)Aa
c
Which of the following would be funded by general obligation (GO) bonds? A)toll road B)Public housing C)A new city hall D)College dorm
c
Which of the debt issues listed here would produce tax-free interest at all levels? A)General obligation bond issued by the County of Los Angeles, California B)26-week T-bill C)General obligation bond issued by Guam D)Florida Transportation Authority revenue bond
c Issues from a territory of the United States (Guam is a territory of the United States) produce interest that is tax free at the federal, state, and local level. Municipal bond interest is tax free at the federal level and tax free at the state level if the bondholder is a resident of the same state as the issuer. Treasury issues are taxed at the federal level.
In investor holds a 5% bond callable in six years and maturing in eight years. The bond's current yield (CY) measures its annual coupon payment relative to A)its value when callable. B)par value. C)its market price. D)its value at maturity.
c The CY measures a bond's annual coupon payment (interest) relative to its market price, as shown in the following equation: annual coupon payment ÷ market price = current yield.
A basis point is valued at A)1/1000th of 1%. B)1% of face value or $10. C)1% of market value. D)1/100th of 1%.
d
A corporate bankruptcy liquidation took place. Of the following—general creditors, secured bondholders, subordinated debenture holders, accrued taxes—who was paid first and who was paid last? A)Secured bondholders first, general creditors last B)Secured bondholders first, accrued taxes last C)General creditors first, secured bondholders last D)Secured bondholders first, subordinated bondholders last
d
A financial institution, in order to raise cash on a short-term basis, sells some of the securities it owns, with an agreement to buy them back at a later date at a slightly higher price. This is known as A)a banker's acceptance. B)a reverse transaction. C)a promissory note. D)a repurchase agreement.
d
A new customer tells you that her objective is to incur little risk because she is anticipating a new home within the next 12 months. Which of the following would be a suitable recommendation? A)T-bonds B)High-yield corporate bonds C)Growth stocks D)T-bills
d
An investor holds a Treasury note with a stated interest of 6%. The investor will receive A)one $60 interest payment per year. B)two $60 interest payments per year. C)one $6 interest payment per year. D)two $30 interest payments per year.
d
An investor holds a bond in which the issuer is scheduled to repay small portions of the principal at intervals over a few years and the majority in the final year. This investor is holding a A)term bond. B)series bond. C)serial bond. D)balloon bond.
d
An investor purchases a T-bill for $9,925 that will mature at $10,000. The difference between the $9,925 paid and the $10,000 that will be received is A)the premium above par and will be considered dividends received at maturity. B)the discount to par and will be considered a capital gain at maturity. C)the premium above par and will be considered the interest received at maturity. D)the discount to par and will be considered interest received at maturity
d
An issuer has a subordinated debt issue outstanding. Which of the following is true? A)A subordinated debenture has a claim that is senior to all other debt issues and equity issues. B)A subordinated debenture has a claim that is senior to all other debt and senior to common stock. C)A subordinated debenture has a claim that is junior to all other debt issues. D)A subordinated debenture has a claim that is junior to all other debt but senior to preferred stock.
d
Debt instruments put up for auction by the U.S. Treasury Department that offer intermediate maturities best describes A)anticipation notes. B)Treasury bills. C)Treasury bonds. D)Treasury notes.
d
Each of the following makes regular interest payments except A)corporate bonds. B)Treasury bonds. C)Treasury notes. D)Treasury STRIPS.
d
Holders of subordinated debt instruments know that in the case of a corporate liquidation, they A)have no priority claim on assets. B)will be paid only after common shareholders claims are satisfied. C)must be paid, regardless of any other claims being met. D)will be paid back last of all debtholders.
d
If investors have income listed as their investment objective, they would not hold which of the following securities in their portfolio? A)Preferred stock B)Corporate bonds C)U.S. T-notes D)Income bonds
d
If the Midlands Pencil Corporation has issued several different debt securities, an investor would expect the lowest income stream from A)speculative bonds. B)ordinary debentures. C)subordinated debentures. D)secured debt.
d
Money market debt instruments typically have maturities of A)longer than 2 years. B)10-30 years. C)1-2 years. D)1 year or less.
d
Money market instruments guaranteed by a bank that are used to provide capital for international trade are called A)foreign bills. B)Eurodollars. C)American depositary receipts (ADRs). D)banker's acceptances (BAs).
d
T-bills are issued (auctioned) by the U.S. Treasury Department how often? A)Only when the U.S. Treasury Department deems it necessary B)Monthly C)Bimonthly D)Weekly
d
The U.S. federal government is the nation's A)smallest borrower and considered least safe credit risk. B)largest borrower and therefore considered least safe credit risk. C)smallest borrower and therefore considered best credit risk. D)largest borrower and considered the best credit risk.
d
Treasury bills A)can be issued with initial maturities of 3, 12, 24, and 50 weeks. B)have the highest interest-rate risk of all Treasury securities. C)are always issued at a slight premium to par value. D)are issued at a discount without a stated interest rate.
d
Which of the following are considered money market securities at the time of issue? A)T-notes B)T-bonds C)Municipal bonds D)T-bills
d
Which of the following debt securities has interest that is subject to federal income tax but not state income tax? A)30-year revenue for a toll bridge B)30-year debenture C)30-year general obligation (GO) bond D)30-year Treasury bond
d
Which of the following earn interest but don't pay interest? A)T-notes B)T-bonds C)None of these D)T-bills
d
Which of the following is a debt instrument that pays no periodic interest? A)Treasury notes B)Treasury bonds C)Corporate bonds D)Treasury STRIPs
d
Which of the following is not a T-bill maturity? A)13 weeks B)26 weeks C)4 weeks D)56 weeks
d
Which of the following is true regarding money market securities? A)T-bills, notes, and bonds are all considered money market securities at the time they are issued. B)Only T-notes can ever be considered money market securities. C)Only T-bonds can ever be considered money market securities. D)T-notes and T-bonds can be considered money market instruments when they have only a year left to maturity.
d
Which of the following securities carries the greatest amount of risk in conjunction with a corporate liquidation? A)Corporate bonds B)Preferred stock C)Debentures D)Common stock
d
Which of the following securities pays interest that is taxable at the state level and tax free at the federal level? A)Any Treasury bond B)A Treasury bond if owned by a U.S. resident C)Any municipal bond D)A municipal bond issued from a state other than the customer's residence
d
Your client has a long-term investment time horizon and is willing to accept some risk to achieve a better rate of return. Of the following, which would be the least suitable recommendation? A)Corporate bonds and T-bonds B)Preferred stock C)Common stock D)T-bills and negotiable CDs
d
Your customer is a resident of the state of Utah. They would pay tax on interest produced by all of the following securities except A)a Richfield Oil Company collateral trust bond. B)a San Bernardino County, California, general obligation bond. C)a Treasury STRIP maturing in five years. D)a Richfield, Utah, general obligation bond.
d
Your customer owns four corporate bonds, all maturing in 10 years. They have different bond ratings. Which likely pays the least interest? A)The Ba-rated bond B)The BB-rated bond C)The BBB-rated bond D)The A-rated bond
d
