Week 3: Chapter 06 1. A _________ is a Treasury security in which periodic coupon interest payments can be separated from the principal payment and from each other. A. STRIP. B. T-note. C. T-bond... . D. GO bond. E. Revenue bond. 2. Treasury security interest income is ________ and municipal bonds interest income is ________. A. exempt from federal taxes; exempt from all taxes B. taxable at the state level only; exempt from state taxes only C. taxable at federal level only; exempt from federal taxes D. taxable at the state level; taxed at the federal level E. totally tax exempt; exempt from state taxes 3. A municipality’s standard revenue bonds are A. backed by the full taxing authority of the municipality. B. collateralized by the earnings from a specific project. C. bonds backed by mortgages. D. backed by the U.S. Treasury. E. always offered with a best efforts offering. 4. All else being equal, the highest required rate of return will be on which of the following bonds? A. AAA-rated noncallable corporate bond with a sinking fund B. AA-rated callable corporate bond with a sinking fund C. AAA-rated callable corporate bond with a sinking fund D. High investment-grade municipal bond E. AA-rated callable corporate bond without a sinking fund 5. Which of the following is correct regarding bond private placements? I. Issuers of privately placed bonds tend to be less well known than public bond [Show More]
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