1. Mary just purchased a bond which pays $60 a year in
interest. What is this $60 called?
A. coupon
B. face value
C. discount
D. call premium
E. yield
2. Bert owns a bond that will pay him $75 each year in
interest plus a $1,000 principal payment at maturity. What is the $1,000
called?
A. coupon
B. face value
C. discount
D. yield
E. dirty price
3. A bond’s coupon rate is equal to the annual
interest divided by which one of the following?
A. call price
B. current price
C. face value
D. clean price
E. dirty price
4. The specified date on which the principal amount of
a bond is payable is referred to as which one of the following?
A. coupon date
B. yield date
C. maturity
D. dirty date
E. clean date
5. Currently, the bond market requires a return of
11.6 percent on the 10-year bonds issued by Winston Industries. The 11.6
percent is referred to as which one of the following?
A. coupon rate
B. face rate
C. call rate
D. yield to maturity
E. interest rate
6. The current yield is defined as the annual interest
on a bond divided by which one of the following?
A. coupon
B. face value
C. market price
D. call price
E. dirty price
7. An indenture is:
A. another name for a bond’s coupon.
B. the written record of all the holders of a bond issue.
C. a bond that is past its maturity date but has yet to be repaid.
D. a bond that is secured by the inventory held by the bond’s issuer.
E. the legal agreement between the bond issuer and the bondholders.
8. Atlas Entertainment has 15-year bonds outstanding.
The interest payments on these bonds are sent directly to each of the
individual bondholders. These direct payments are a clear indication that the
bonds can accurately be defined as being issued:
A. at par.
B. in registered form.
C. in street form.
D. as debentures.
E. as callable.
9. A bond that is payable to whomever has physical
possession of the bond is said to be in:
A. new-issue condition.
B. registered form.
C. bearer form.
D. debenture status.
E. collateral status.
10. The Leeward Company just issued 15-year, 8
percent, unsecured bonds at par. These bonds fit the definition of which one of
the following terms?
A. note
B. discounted
C. zero-coupon
D. callable
E. debenture
