SIE Debt Securities and Fixed Income

Question 1

What is the par value of a standard corporate bond?

Accepted Answer

$1,000

Answer

$100

Answer

$500

Answer

$10,000

Question 2

When interest rates rise, what happens to existing bond prices?

Accepted Answer

Bond prices fall

Answer

Bond prices rise

Answer

Bond prices remain unchanged

Answer

Bond yields fall

Question 3

What is a callable bond?

Accepted Answer

A bond the issuer can redeem before maturity

Answer

A bond that can be converted to stock

Answer

A bond that pays variable interest

Answer

A bond backed by collateral

Question 4

Which type of bond is backed by the full faith and credit of the US government?

Accepted Answer

US Treasury securities

Answer

Municipal bonds

Answer

Corporate bonds

Answer

Agency bonds

Question 5

What is the coupon rate of a bond?

Accepted Answer

The annual interest rate stated on the bond at issuance

Answer

The bond's current yield in the market

Answer

The bond's yield to maturity

Answer

The discount rate used to price the bond

Question 6

Zero-coupon bonds are sold:

Accepted Answer

At a discount and pay no periodic interest

Answer

At par with no interest payments

Answer

At a premium above par

Answer

With floating interest rates