Understanding Bonds: A Financial Instrument Quiz

Understanding Bonds: A Financial Instrument Quiz

Assessment

Interactive Video

Business

9th - 10th Grade

Hard

Created by

Nancy Jackson

FREE Resource

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a bond primarily considered as in the financial sector?

A government grant

A type of stock

A form of IOU

A bank loan

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How do bond prices typically react to changes in interest rates?

They remain constant

They increase with interest rates

They inversely correlate with interest rates

They decrease with interest rates

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why might a company choose to issue bonds instead of taking a bank loan?

Banks offer lower interest rates

Bonds provide a way to raise larger amounts of capital

Banks are more reliable

Bonds are less risky

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the term for the interest payments made to bondholders?

Premium

Coupon

Yield

Dividend

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the face value of a bond?

The initial purchase price

The market value

The amount paid at maturity

The interest rate

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the maturity date of a bond?

The date when the bond's value is fully repaid

The date when the bond is issued

The date when the bond is sold

The date when interest payments start

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary risk associated with investing in bonds?

Interest rate fluctuations

Stock market volatility

Credit quality of the issuer

Government regulations

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