Quiz on Bonds and Investments

Bonds are primarily issued by which entities?

• Individuals

• Governments and large companies

• Small businesses

• Non-profit organizations

What is the principal of a bond?

• The interest rate

• The credit rating

• The maturity date

• The amount borrowed

What is the main purpose of issuing government bonds?

• To invest in the stock market

• To raise money

• To pay off existing debts

• To regulate the economy

What are British government bonds called?

• Treasury bills

• Gilt-edged stock

• Corporate bonds

• Zero-coupon bonds

Which type of bond typically has a lower interest rate compared to a bank loan?

• Government bonds

• Corporate bonds

• Zero-coupon bonds

• Junk bonds

What does a credit rating indicate?

• The bond's maturity date

• The company's ability to repay the loan

• The interest rate on the bond

• The bond's market price

How does the price of a bond typically react to a rise in interest rates?

• It increases

• It decreases

• It remains unchanged

• It fluctuates unpredictably

What is a 'yield' in the context of bonds?

• The credit rating

• The interest rate

• The maturity date

• The amount of income generated

What are convertible shares?

• Bonds that can be exchanged for company stock

• Shares that can be converted into bonds

• Zero-coupon bonds

• Bonds with a very low credit rating

What is the main characteristic of zero-coupon bonds?

• They pay no interest

• They have a very high interest rate

• They are backed by government assets

• They are traded on the stock exchange