personal finance chapter 15
You own a $1,000 bond that pays 9.25 percent interest. What is the amount of interest you will receive each six months?
$46.25
Corporate bonds are a form of equity financing that does not have to be repaid.
false
Generally, interest on corporate bonds is paid every:
six months.
Bond interest payments are a tax-deductible business expense.
true
Treasury notes are issued in $100 units with a maturity of more than 1 year, but not more than 10 years.
true
Assume that you purchase a $1,000 corporate bond that pays 9.25 percent interest. What is the amount of interest that you receive each year?
$92.50
If a bond is quoted in the newspaper at 92, the current price of a $1,000 face value bond is
$920.00.
Which one of the following statements is correct?
Bonds are a form of debt capital.
Which one of the following statements is true?
Corporate bonds are a form of equity.
Which one of the following statements is false?
It is possible to obtain information about a corporation that issues a bond by accessing the corporation's home page on the internet.
A government security issued in minimum units of $100 with maturities that are one year or less is called a:
Treasury bill.
A government security issued in $100 units with maturities of more than one year but not more than ten years is called a:
Treasury note.
A bond that is backed only by the reputation of the issuing corporation is called a(n) ____________ bond.
debenture
Maturity dates for corporate bonds generally range from 5 to 10 years.
false
Treasury bills are issued in minimum units of $10,000 with maturities that range from 10 to 30 years.
false
With the use of technology and computers, the book entry form of bond ownership is no longer used.
false
A corporate bond that is secured by various assets of the issuing firm is called a(n) ____________ bond.
mortgage
A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest.
true
A registered bond is a bond whose ownership is registered in the owner's name by the issuing company.
true
