Shilpa Mali

Which of the following is NOT a characteristic of a bond?

• Coupon Rate

• Maturity Date

• Stock Price

• Credit Rating

Answer explanation

A bond with a higher coupon rate will generally have a:

• Higher price

• Lower price

• No impact on price

• Depends on the maturity

What type of bond is most susceptible to interest rate risk?

• Zero-coupon bond

• Short-term bond

• Long-term bond with a high credit rating

• Convertible bond

Which of the following statements about credit risk is TRUE?

• Government bonds have the highest credit risk.

• Corporate bonds all have the same credit risk.

• A higher credit rating indicates a lower risk of default.

• Credit risk cannot be mitigated.

What is the main difference between a government bond and a corporate bond?

• Government bonds have no maturity date.

• Corporate bonds offer higher interest rates.

• Government bonds are generally considered less risky.

• Corporate bonds can be converted into stock.

If interest rates rise in the market, what is likely to happen to the price of existing bonds?

• Increase

• Decrease

• Remain unchanged

• It depends on the credit rating

Which of these types of investments has the largest amount of available securities?

• Stocks

• Government securities

• Equities

• Fixed income