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Ch. 19 - Bonds & Mutual Funds

Quiz by Timothy Jenson

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30 questions
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  • Q1
    Biotechnology is an example of an index fund.
    False
    True
    30s
  • Q2
    Mid-cap funds include stocks of companies with total capitalization of $2 billion to $10 billion.
    True
    False
    30s
  • Q3
    Government bonds have a high risk default.
    False
    True
    30s
  • Q4
    Index funds may have lower management fees.
    False
    True
    30s
  • Q5
    When a company calls a bond, it usually owes bondholders a premium.
    True
    False
    30s
  • Q6
    A bond price quotation is the percentage of the bond’s face value used to determine its current market value.
    True
    False
    30s
  • Q7
    A sinking fund is losing money.
    True
    False
    30s
  • Q8
    Series I bonds are inflation-indexed.
    True
    False
    30s
  • Q9
    A mortgage bond may be traded for shares of common stock.
    True
    False
    30s
  • Q10
    To pay for a new school, a local government may issue a municipal bond.
    True
    False
    30s
  • Q11
    An investor can trade a bond for shares of the corporate stock if the bond is a ____.
    Convertible bond
    Debenture
    Subordinated debenture
    Mortgage bond
    30s
  • Q12
    To reach maturity, Treasury bills take between ____.
    4 to 52 weeks
    6 months to 30 years
    1 to 10 years
    10 to 30 years
    30s
  • Q13
    A typical corporate bond states all of the following facts about the bond EXCEPT ____.
    Its face value
    The maturity date
    The interest rate
    The amount of interest paid
    30s
  • Q14
    The investment that offers the highest rate of interest is ____.
    A Treasury note
    An agency bond
    An EE savings bond
    A Treasury bond
    30s
  • Q15
    What is the formula for computing the approximate market value of a bond?
    Face value – purchase price
    Amount of annual interest ÷ interest rate of new bonds
    Amount of annual interest + capital gain
    Face value x annual interest rate
    30s

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