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INV 101 - Chapters 9 & 10

Authored by Olivia Gonzales

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Professional Development

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INV 101 - Chapters 9 & 10
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30 questions

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1.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

1. Which of the following entities raises external capital to finance their operations by issuing a combination of equity and debt securities?

Companies

Governments

Both companies and governments

2.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

2. Which of the following classifications of debt securities is backed by collateral?

Secured debt

Subordinated debt

Senior unsecured debt

3.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

3. Which of the following characteristics most likely remains unchanged during the life of an inflation-linked bond?

Par value

Coupon rate

Coupon payments

4.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

4. Which debt security promises its investors only one payment over the life of the bond?

Fixed-rate bond

Zero-coupon bond

Floating-rate bond

5.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

5. Which of the following provisions in a debt security is a right of the issuer?

Put

Call

Conversion

6.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

6. A key reason that issuers include a call provision in a bond is to:

Retire an outstanding issue if market interest rates decline

Not have to pay a premium if the bond is retired before maturity

Provide bondholders the opportunity to sell the bond if rates rise

7.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

7. Ratings assigned to debt securities by credit rating agencies help investors assess:

Default risk

Inflation risk

Interest rate risk

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