Chapter 19 Flashcards
the date when a bond will be repaid
maturity date
the dollar amount that a bondholder will receive at a bond’s maturity
face value
a bond that is backed only by the reputation of the issuing corporation, rather than by its asset
debenture
A bonds that is backed by the assets of a corporation
mortgage bond
Bonds that an investor can trade for shares of common stock
convertible bond
a fund in which the corporation makes deposits for the purpose of paying back a bond issue
sinking fund
bonds issued at the same time but which mature on different dates
serial bonds
bond registered in the owner’s name by the company that issues the bond
registered bond
bond that is registered in the owner’s name for only the face value and not for interest
coupon bond
bond that is not registered in the investor’s name
bearer bond
bond that does not produce interest payments
zero-coupon bond
security issued by a state or local government to pay for its ongoing activities
municipal bond
bonds that are issued by financially stable companies or municipalities
investment grade bond
rate of return, usually stated as a percentage, earned by an investor who holds a bond for a certain period of time
yield
a mutual fund with a fixed number of shares that are issued by an investment company when the fund is first organized
closed-end fund
fund that invests in stocks or other securities contained in a specific stock or securities index
exchange traded fund
is a mutual fund with an unlimited number of shares that are issued and redeemed by an investment company at the investors request
open end fund
amount that one share of a mutual fund is worth
net asset value (nav)
mutual fund for which is pay a commission every time you buy or sell shares
load fund
mutual fund that has no commission fee
no load fund
the earnings a fund pays to shareholders
income dividends
additional amount above the face value of the bond
premium
large urban area
metropolian
riskier
speculative
made up for
compensated
legally owned security
holding
completely used up
exhausted
“sell off” a certain number of shares each investment period
liquidate
A state or local government issues ____ to pay for ongoing activities.
municipal bonds
Potential investors can find detailed information about a particular mutual fund in a report called a(n) ____
prospectus
Companies or municipalities with good financial stability issue ____
investment grade bonds.
A(n) _____ is repaid from the income generated by the project it is designed to finance.
revenue bond
The assets of a corporation are used to back a(n) _____
mortgage bond.
The amount one mutual fund share is worth is called its ______
Net Asset Value (NAV).
The individual investor pays no commission for investing in a(n) _____
no-load fund.
_____ are issued at the same time but mature on different dates.
Serial bonds
Payments made to shareholders that result from the sale of securities in a funds portfolio are ______
capital gain distributions.
A(n) ______ has a fixed number of shares that are issues by an investment company when the fund is first organized.
closed-end fund
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
receives at maturity
Assets of a corporation may be sold to repay a…
Mortgage bond
Debenture
Convertible bond
Bond indenture
mortgage bond
An additional amount that a company pays above the value of its bond is called…
Sinking fund
Coupon
Premium
Interest check
premium
Only the bond owner can collect interest from a…
Registered bond
Registered coupon bond
Bearer bond
Zero-Coupon bond
registered bond
Which investment offers the highest rate of interest?
Treasury bill
Treasury bond
Series EE Savings bond
Agency bond
agency bond
Municipal bonds are offered by all the following levels of government except…
Federal
State
County
City
federal
The lowest Standart & Poor’s rating a bond can have and still be considered investment grade is…
B
BB
BBB
C
BBB
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
Divide the amount of annual interest income by the bond’s current market value
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
withdrawing money from the fund
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
contractual savings plan
