Quiz on Bonds and Mutual Funds

A bond is loaned money to a company or governmental entity.

• True

• False

If a bond is held to maturity, the investor will receive the coupon rate back.

• True

• False

The declared interest of a bond is called the face value.

• True

• False

The primary way that the US, state, and local government borrows money to finance capital investments and cash flow needs is the municipal securities market.

• True

• False

The corporate bond market handles obligations that are issued by corporations for capital and operating cash flow purposes.

• True

• False

Bonds are always bought and sold in the US in the over-the-counter market.

• True

• False

Investors can buy and sell bonds that have already been issued. This is called the secondary market.

• True

• False

A mutual fund is pooled money of its shareholders being invested in various types of investments.

• True

• False

A fund manager buys and sells securities for the mutual fund’s shareholders.

• True

• False

The benefits of mutual funds include low liquidity, high-cost shares, and individual management of the account.

• True

• False