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. R
...
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
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