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CHAPTER 6

Authored by Gia Khánh Mai

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University

CHAPTER 6
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11 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does a bond certificate state?

The terms of a bond and payment details

Only the maturity date

The face value of the bond

The coupon rate

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a zero-coupon bond?

A bond that pays interest periodically

A bond that makes only one payment at maturity

A bond that has a high coupon rate

A bond that is issued by corporations

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the yield to maturity (YTM)?

The rate of return of an investment in a bond

The coupon rate of a bond

The face value of a bond

The price of a bond

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does trading at a discount mean?

Trading below par value

Trading above par value

Trading at face value

Trading at a premium

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the difference between clean price and dirty price?

Clean price includes accrued interest

Dirty price is the actual price of the bond

Clean price is always higher than dirty price

There is no difference

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the credit risk of a bond?

The risk of default by the issuer

The risk of interest rate changes

The risk of market fluctuations

The risk of inflation

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are investment-grade bonds?

Bonds with the highest credit ratings

Bonds with low risk of default

Bonds rated by Standard & Poor's

All of the above

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