MGF2223 (QUIZ 2)

Bondholders can only earn income from interest payment (coupon payment).

• 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 investor approach retirement age, they should hold more bonds and less stocks.

• True

• False

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

• True

• False

Each interest payment on a 6 percent, semi-annual bond is RM30.

• True

• False

Bonds with a maturity between five and twelve years are generally considered short-term.

• True

• False

Holders of preferred stock usually do not have voting rights.

• True

• False

Preferred stock means the company is preferred over of the companies in a particular industry.

• True

• False

If a company issues dividends, preferred stock holders are paid the dividend first.

• True

• False

The expected rate of return on a bond if bought at its current market price and held to maturity.

• Yield to Maturity

• Coupon Yield

• Current Yield

• Yield to Call