BOND

TIPS are a Treasury offering that protects investors from unexpected increases in inflation.

• TRUE

• FALSE

A callable bond is one where the issuer is required to retire a certain amount of the outstanding bonds each year to ensure that all the bond principal is paid by final maturity.

• TRUE

• FALSE

Treasury notes and bonds and municipal bonds are default risk free.

• TRUE

• FALSE

"On the run" Treasury notes and bonds are newly issued securities and "off-the-run" Treasuries are securities that have been previously issued.

• TRUE

• FALSE

T-notes and T-bonds are issued in minimum denominations of $100, or multiples of $100.

• TRUE

• FALSE

The dirty price plus accrued interest is called the clean price of the security.

• TRUE

• FALSE

Accrued interest owed to the bond seller increases as the next coupon payment date approaches.

• TRUE

• FALSE

Revenue bonds are backed by the full revenue of the municipality.

• TRUE

• FALSE

In a Treasury bond quote with a $1,000 face value, you find the bid is equal to 100-24 and the ask is equal to 100-26. You could buy this bond for $1,008.125.

• TRUE

• FALSE

An unsecured bond that has no specific collateral other than the general creditworthiness of the issuing firm is called a debenture.

• TRUE

• FALSE