Bonds

What is a bond?

• A type of stock that gives ownership rights

• A loan from the buyer to the issuer

• A cash investment with high interest rates

• A type of mutual fund

What are the potential benefits of holding bonds in a portfolio?

• Potential for high returns and ownership rights

• Stream of income and lower risk so they offset volatility

• Liquidity and growth potential

What is the coupon of a bond?

• The bond's face value

• The bond's current price

• The bond's interest rate

• The bond's maturity date

What factors should be considered when choosing bonds?

• Maturity & duration

• Quality

• Types of bonds

• All of the above

Which type of bond is considered the safest possible investment?

• Federal Government

• Junk bonds

• Municipal bonds

• Corporate bonds

What is the main disadvantage of investing in high-yield bonds?

• Low credit ratings and high risk

• Low liquidity and low returns

• High taxes and low yields

• High volatility and low diversification

Why would someone buy a bond instead of a stock?

• It is a less risky investment
• It can yield a higher return on investment
• To have ownership in a company
• To receive dividend payments

What is a bond? 

• a certificate of ownership in a corporation, with the right to a share of the earnings 
• a certificate representing a loan from an investor to a corporation or government entity 
• a payment from an investor to a corporation for the rights to future profits 
• a group of stocks sold together for a set price