Bonds Quiz

What is a bond?

• A type of commodity

• A type of real estate investment

• A type of debt security

• A type of equity security

What is the coupon rate?

• The risk level of the bond

• The price of the bond at issuance

• The interest rate paid on the bond

• The total amount paid at maturity

Which type of bond is typically considered low-risk?

• Corporate Bonds

• Junk Bonds

• Government Bonds

• Municipal Bonds

What happens to bond prices when interest rates rise?

• They increase

• They decrease

• They remain the same

• They become more volatile

What is credit risk in the context of bonds?

• The risk of inflation affecting returns

• The risk of market volatility

• The risk of fluctuating interest rates

• The risk of the issuer defaulting on payments

What is the maturity date of a bond?

• The date when the bond is issued

• The date when the bondholder receives the principal amount

• The date when interest payments begin

• The date when the bond can be converted to stock

What is a callable bond?

• A bond that pays a higher interest rate

• A bond that cannot be sold in the secondary market

• A bond that can be redeemed before maturity

• A bond that is issued at a discount

What does it mean when a bond is rated 'AAA'?

• It has a high risk of default

• It is considered investment grade with low risk

• It has a moderate risk of default

• It is a speculative investment