
FIN1413 @ 15/11/2024
Authored by Fun Huong
Business
9th - 12th Grade
Used 1+ times

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8 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 10 pts
What is a bond, and how is it typically traded in Malaysia?
A negotiable debt security traded only on international markets.
A debt instrument where the issuer borrows money, pays fixed interest, and repays the principal on maturity; traded on Bursa Malaysia or over-the-counter.
A shareholding security traded on Bursa Malaysia.
A negotiable instrument with a par value of RM500 per unit in Malaysia.
2.
MULTIPLE CHOICE QUESTION
30 sec • 10 pts
What are the two types of returns that bondholders can benefit from?
Interest and dividends.
Capital gain and profit-sharing.
Interest and capital gain.
Fixed coupon rate and equity growth.
3.
MULTIPLE CHOICE QUESTION
30 sec • 10 pts
Which feature of a bond specifies the interest paid annually based on the par value?
Bond price.
Maturity date.
Coupon rate.
Par value.
4.
MULTIPLE CHOICE QUESTION
1 min • 10 pts
Which of the following is a key risk associated with bond investments?
Bonds always guarantee high returns regardless of market conditions.
Bond prices increase when market interest rates rise, leading to capital loss.
Market interest rate fluctuations can cause bond prices to decrease, leading to potential capital loss.
Bonds are risk-free and unaffected by changes in interest rates or market conditions.
5.
MULTIPLE CHOICE QUESTION
1 min • 10 pts
What is call risk in bond investment?
The risk that the bond issuer will default on interest payments.
The risk that the bond issuer will repay the bond before maturity, typically when interest rates decline.
The risk that market interest rates will increase, reducing the bond's value.
The risk that bondholders cannot sell the bond in the secondary market.
6.
MULTIPLE CHOICE QUESTION
1 min • 10 pts
What does liquidity risk in bond investment refer to?
The risk that the bond issuer will fail to pay interest or principal.
The risk that the bondholder will not be able to sell the bond quickly at a fair price.
The risk that market interest rates will decline, reducing the bond's yield.
The risk that the bond will be called back by the issuer before maturity.
7.
MULTIPLE CHOICE QUESTION
1 min • 10 pts
What is the relationship between coupon rates, market interest rates, and bond prices?
When market interest rates rise above a bond's coupon rate, the bond price increases.
When market interest rates fall below a bond's coupon rate, the bond price increases.
A bond's price is unaffected by changes in market interest rates.
Bond prices always decrease regardless of coupon rates or market interest rates.
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