Fixed-Income Securities

Bondholders can only earn income from interest.

• True

• False

The primary reasons for owning bonds are the income they provide and also the stability they bring to an investment portfolio.

• True

• False

As investors approach retirement age, they should hold more bonds and less stock.

• True

• False

Bond prices are stable over any five- to ten-year period.

• True

• False

Bonds are typically a good investment choice for an individual who is seeking short-term preservation of capital.

• True

• False

Corporate bonds are actively traded in the secondary markets.

• True

• False

Each interest payment on a 6%, semi-annual bond is $60.

• True

• False

Each interest payment on a 6%, semi-annual bond is $30.

• True

• False

When a bond is called, the bondholder generally faces a rate of return that is lower than expected.

• True

• False

The holder of a serial bond receives both semi-annual interest and principal payments over the life of the bond.

• True

• False