A home loan with fixed monthly payments and the house as collateral most closely represents which of the following bond characteristics?
A) Secured and term.
B) Secured and serial.
C) Unsecured and term.
D) Unsecured and serial.
Answer: B
Which of the following is not true regarding callable bonds?
A) This feature allows the issuer to repay the bonds before their scheduled maturity date.
B) This feature helps protect the issuer against future decreases in interest rates.
C) This feature usually allows the issuer to repay bonds just below face value.
D) This feature benefits the issuer more when the bond's stated rate is 8% and the market interest rate is 5%.
Answer: C
Bonds can be secured or unsecured. Likewise, bonds can be term or serial bonds. Which is more common?
A) Secured and term.
B) Secured and serial.
C) Unsecured and term.
D) Unsecured and serial.
Answer: C
