WorksheetsDebt Securities
Total questions: 25
Worksheet time: 25mins
A financial asset that represents an agreement between a lender and borrower.
Debt
Security
Debt Security
Bond
Define a Lender.
Issuer of the security
Buyer of the security
Define Borrower
Issuer of the security
Buyer of the security
Which of the follow would not be a name used to refer to Debt Securities?
Bond
Note
Money Market
Securities
Owning a debt security is the opposite of being in debt.
True
False
An individual buys a debt security from a bank. Which of the following would be true?
The individual is borrowing money and the bank is lending money.
The individual is lending money and the bank is borrowing money.
Which of the following would be a benefit to selling stock in a company?
You are giving up ownership of your company.
It can decrease your power and control over your company.
You don't have to pay the money back.
(a) - refers to long term debt (greater than 12 months)
(a) - used to describe a timeframe that is intermediate (no set timeframe, just not very long term). No more than ten years.
(a) - very short term debt (12 months or less)
Which of the following is true of the Bond Market?
It is usually three times the size of the stock market.
It is usually three times smaller than the stock market.
It is not as popular as the stock market.
It is the smallest of the securities market place.
Bob bought a bond in 2004 that was issued in 2000 with a maturity date in 2030. What would Bob be considered?
Lender
Borrower
Bob bought a bond in 2004 that was issued in 2000 with a maturity date in 2030. What will happen on the maturity date?
Borrowed money is returned to the bond issuer and the last interest payment will be made.
Borrowed money is returned to the lender and the last interest payment will be made.
Which of the following determines whether a debt security is called a money market, note, or bond?
Coupon
Date issued
Amount
Maturity
What is another word that also means par value?
par in golf
principal
coupon
annualized rate
The Par Value is the _____________ of the bond.
amount
issuer
denominator
denomination
You should assume a bond's par value is _______ unless otherwise stated.
$10
$100
$1,000
$10,000
Interest is earned as a percentage of the number as a set rate. What is that rate called?
Earned income
Coupon
Debt
The coupon rate should be one of the main considerations for an investor
True
False
Which would best describe a bond?
Investors lend and issuers borrow
Issuers lend and investors borrow
When market interest rates increase, what is the effect on bonds that have already been issued?
The price of the bond goes down.
The price of the bond goes up.
What is used to determine how much interest can be earned annually?
Par Value and coupon rate
Market Price and par value
Purchase amount
When a bond's value increases due to market demand, this is known as ______.
par value
discount
premium price
appreciation
If a bond's coupon rate is HIGHER than coupon rates on other bonds currently being issues the result is a _______ price.
discount
par
premium
If a bond's coupon rate is LOWER than coupon rates on other bonds being issued the result is a ______ price.
par
premium
discount
