Quiz on Bonds and Mutual Funds

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

• True

• False

What is the amount of annual interest on a corporate bond of $6,000 with 5% interest?

• 150

• 240

• 300

• 480

A back-end load is when the commission is charged on the purchase of a mutual fund.

• True

• False

What is the amount of net interest on the corporate bond of $6,000 with 5% interest if the tax rate is 25%?

• 75

• 150

• 300

• 375

Earnings on a 10 year, $10,000, 6 percent corporate bond. What is the amount of interest paid annually to the bond holder?

• 300

• 600

• 3,000

• 6,000

A balanced fund invests primarily in common stocks.

• 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

Things to consider when deciding on a mutual fund include the objective, the securities the fund owns, the level of risk, and the earning record.

• True

• False

A front-end load is when the commission is charged on the purchase of a mutual fund.

• True

• False

What is the amount of tax on a municipal bond with face value of $6,000 and 4% interest?

• 0

• 75

• 150

• 225