Chapter 19 Flashcards

1
Q

the date when a bond will be repaid

A

maturity date

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2
Q

the dollar amount that a bondholder will receive at a bond’s maturity

A

face value

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3
Q

a bond that is backed only by the reputation of the issuing corporation, rather than by its asset

A

debenture

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4
Q

A bonds that is backed by the assets of a corporation

A

mortgage bond

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5
Q

Bonds that an investor can trade for shares of common stock

A

convertible bond

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6
Q

a fund in which the corporation makes deposits for the purpose of paying back a bond issue

A

sinking fund

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7
Q

bonds issued at the same time but which mature on different dates

A

serial bonds

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8
Q

bond registered in the owner’s name by the company that issues the bond

A

registered bond

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9
Q

bond that is registered in the owner’s name for only the face value and not for interest

A

coupon bond

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10
Q

bond that is not registered in the investor’s name

A

bearer bond

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11
Q

bond that does not produce interest payments

A

zero-coupon bond

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12
Q

security issued by a state or local government to pay for its ongoing activities

A

municipal bond

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13
Q

bonds that are issued by financially stable companies or municipalities

A

investment grade bond

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14
Q

rate of return, usually stated as a percentage, earned by an investor who holds a bond for a certain period of time

A

yield

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15
Q

a mutual fund with a fixed number of shares that are issued by an investment company when the fund is first organized

A

closed-end fund

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16
Q

fund that invests in stocks or other securities contained in a specific stock or securities index

A

exchange traded fund

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17
Q

is a mutual fund with an unlimited number of shares that are issued and redeemed by an investment company at the investors request

A

open end fund

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18
Q

amount that one share of a mutual fund is worth

A

net asset value (nav)

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19
Q

mutual fund for which is pay a commission every time you buy or sell shares

A

load fund

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20
Q

mutual fund that has no commission fee

A

no load fund

21
Q

the earnings a fund pays to shareholders

A

income dividends

22
Q

additional amount above the face value of the bond

A

premium

23
Q

large urban area

A

metropolian

24
Q

riskier

A

speculative

25
Q

made up for

A

compensated

26
Q

legally owned security

A

holding

27
Q

completely used up

A

exhausted

28
Q

“sell off” a certain number of shares each investment period

A

liquidate

29
Q

A state or local government issues ____ to pay for ongoing activities.

A

municipal bonds

30
Q

Potential investors can find detailed information about a particular mutual fund in a report called a(n) ____

A

prospectus

31
Q

Companies or municipalities with good financial stability issue ____

A

investment grade bonds.

32
Q

A(n) _____ is repaid from the income generated by the project it is designed to finance.

A

revenue bond

33
Q

The assets of a corporation are used to back a(n) _____

A

mortgage bond.

34
Q

The amount one mutual fund share is worth is called its ______

A

Net Asset Value (NAV).

35
Q

The individual investor pays no commission for investing in a(n) _____

A

no-load fund.

36
Q

_____ are issued at the same time but mature on different dates.

A

Serial bonds

37
Q

Payments made to shareholders that result from the sale of securities in a funds portfolio are ______

A

capital gain distributions.

38
Q

A(n) ______ has a fixed number of shares that are issues by an investment company when the fund is first organized.

A

closed-end fund

39
Q

The face value of a bond is the amount a bondholder…
Pays for the bond
Receives at maturity
Receives in interest
Loses if the corporation fails

A

receives at maturity

40
Q

Assets of a corporation may be sold to repay a…
Mortgage bond
Debenture
Convertible bond
Bond indenture

A

mortgage bond

41
Q

An additional amount that a company pays above the value of its bond is called…
Sinking fund
Coupon
Premium
Interest check

A

premium

42
Q

Only the bond owner can collect interest from a…
Registered bond
Registered coupon bond
Bearer bond
Zero-Coupon bond

A

registered bond

43
Q

Which investment offers the highest rate of interest?
Treasury bill
Treasury bond
Series EE Savings bond
Agency bond

A

agency bond

44
Q

Municipal bonds are offered by all the following levels of government except…
Federal
State
County
City

A

federal

45
Q

The lowest Standart & Poor’s rating a bond can have and still be considered investment grade is…
B
BB
BBB
C

A

BBB

46
Q

How do you find the current yield of a bond?
Divide the bonds current market value by the amount of annual interest income
Divide the amount of annual interest income by the bonds current market value
multiply the face value times the annual rate of interest
Multiply the face value times the rate of return

A

Divide the amount of annual interest income by the bond’s current market value

47
Q

A back-end load on a mutual fund is charged for…
Each purchase of shares
Managing the mutual fund
Markting and advertising the fund
Withdrawing money from the fund

A

withdrawing money from the fund

48
Q

Investors pay penalty fees if they fail to make regular purchases of shares when investing in a mutual fund under a…
regular account transaction
Voluntary savings plan
Contractual savings plan
Reinvestment plan

A

contractual savings plan