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