Bonds

Fixed income securities pay a fixed amount and promise to return your principal at some point in the future.

• True

• False

A bond is a financial contract where one -party, the debtor, loans money to the borrower, or creditor, in return for a series of fixed interest payments and the return of the face value, or par value of the bond.

• True

• False

Fixed income securities often appeal to people in their 20’s.

• True

• False

US Treasury is the largest issuer of debt securities in the world.

• True

• False

Bondholders have priority over stockholders.

• True

• False

Bond yield is the rate of return if you hold the bond until maturity.

• True

• False

Market interest rates and bond prices move in the same direction.

• True

• False

Bonds are considered less risky than stocks.

• True

• False

If you sell a CD before the maturity date there is usually not penalty or fee.

• True

• False

A call feature on a bond means the issuer can call away your bond in exchange for cash payment in excess of the face value, before the maturity date.

• True

• False