Flashcard on Bonds and Mutual Funds

Front

A bond is loaned money to a company or governmental entity.

Back

True

Front

If a bond is held to maturity, the investor will receive the coupon rate back.

Back

False

Front

The declared interest of a bond is called the face value.

Back

False

Front

The primary way that the US, state, and local government borrows money to finance capital investments and cash flow needs is the municipal securities market.

Back

True

Front

The corporate bond market handles obligations that are issued by corporations for capital and operating cash flow purposes.

Back

True

Front

Bonds are always bought and sold in the US in the over-the-counter market.

Back

False

Front

Investors can buy and sell bonds that have already been issued. This is called the secondary market.

Back

True

Front

A mutual fund is pooled money of its shareholders being invested in various types of investments.

Back

True

Front

A fund manager buys and sells securities for the mutual fund’s shareholders.

Back

True

Front

The benefits of mutual funds include low liquidity, high-cost shares, and individual management of the account.

Back

False