Banking & Finance- Ch 31 Quiz

Which is a tradable document that shows evidence of debt or ownership?

• a commodity

• a security

• a yield

• an investment

Which term refers to the money an investment earns?

• the discount

• the commission

• the option

• the yield

What is a certificate issued by a government or company by which it promises to pay back borrowed money at a fixed rate of interest?

• a bond

• a commodity

• a yield

• a coupon rate

What is the yield on a bond called?

• the commission

• the bond discount

• the coupon rate

• the maturity rate

What is the difference between the amount you pay for a bond and its face value?

• the discount

• the commission

• the coupon rate

• the yield

Which is NOT a type of security that the U.S. Treasury Department issues?

• Treasury Bills

• Stocks

• Notes

• Bonds

Treasury bills are sold in units of how much?

• 50

• 100

• 1000

• 1500

Which statement is NOT true regarding U.S. savings bonds?

• They are registered bonds

• They are sold in denominations of $50 to $10,000

• They cannot be bought or sold once purchased

• They can be redeemed at any time

Which statement is NOT true regarding a Series EEsavings bonds?

• It costs half the amount of its face value

• The interest rate fluctuates over the life of the bond

• You pay a penalty if you cash the bond before 5 years

• It can become worth more than its face value

Which statement is NOT true regarding Series I savings bonds?

• It costs half the amount of its face value

• The interest rate fluctuates over the life of the bond

• As inflation goes up, the interest rate on the bond increases.

• If you redeem the bond before 5 years, you forfeit three months interest.