MCQ's

 6. A bond with a face value of $1,000 that sells for more than $1,000 in the market is called a: 

A) Par bond. 

B) Discount bond. 

C) Premium bond. 

D) Zero coupon bond. 

E) Floating rate bond. 

7. The long-term bonds issued by the United States government are called: 

A) Treasury bonds. 

B) Municipal bonds. 

C) Floating rate bonds. 

D) Junk bonds. 

E) Zero coupon bonds. 

8. A bond that makes no coupon payments (and thus is initially priced at a deep discount to par value) is called a _______ bond. 

A) Treasury 

B) municipal 

C) floating rate 

D) junk 

E) zero coupon 

9. A bond which, at the election of the holder, can be swapped for a fixed number of shares of common stock at any time prior to the bond's maturity is called a _____________ bond. 

A) zero coupon 

B) callable 

C) putable 

D) convertible 

E) warrant 

10. The annual coupon payment of a bond divided by its market price is called the: 

A) Coupon rate. 

B) Current yield. 

C) Yield to maturity. 

D) Bid-ask spread. 

E) Capital gains yield.