What is a bond?

What is a bond's coupon?

• The value of a bond at its issue date
• The value of a bond at its maturity date
• The rate of interest to be paid by the bond issuer
• The purchase price of a bond

A bond's face value may also be called the

• par value
• coupon
• maturity
• final payment

Which of the following is the LEAST risky investment?

• corporate bonds
• stocks
• U.S. Treasury bonds
• mutual funds

A bond's interest rate is also called its 

• par value
• coupon rate
• face value
• principal

A zero-coupon bonds pays interest 

• periodically
• at the maturity date
• at the time of purchase
• never

Why would someone buy a bond instead of a stock?

• It is a less risky investment
• It can yield a higher return on investment
• To have ownership in a company
• To receive dividend payments

Which bond is considered a "junk bond" according to its Moody rating?

• Abc
• Aa
• Baa1
• Ba1

What is a bond? 

• a certificate of ownership in a corporation, with the right to a share of the earnings 
• a certificate representing a loan from an investor to a corporation or government entity 
• a payment from an investor to a corporation for the rights to future profits 
• a group of stocks sold together for a set price 

A bond that pays all of its interest and principal at the bond’s maturity date is called a 

• a zero-coupon bond
• a bond fund
• a coupon bond
• a par-value bond

Generally speaking, which of the following best describes the relationship between a bond’s coupon rate and its credit rating? 

• The relationship cannot be determined. 
• As the bond’s rating improves, the coupon rate increases. 
• As the bond’s rating declines, the coupon rate decreases. 
• As the bond’s rating improves, the coupon rate decreases.