A CDO is a debt security collateralized by debt obligations, such as residential and commercial mortgage backed securities.   Question 19 options:   True   False

5. What is the difference between a general obligation bond and a revenue bond and what the difference means in terms of risk to an investor?

Multiple ChoiceIdentify the choice that best completes the statement or answers the question.      9.  For a liability to exist, a. a past transaction or event must have occurred. b. the exact amount must be known. c. the identity of the party owed must be known. d. an obligation to pay cash in the future must exist.      10.  The effective interest rate on bonds is higher than the stated rate when bonds sell a. at face value. b. above face value. c. below face value. d. at maturity value.      11.  The effective interest rate on bonds is lower than the stated rate when bonds sell a. at maturity value. b. above face value. c. below face value. d. at face value.      12.  When interest expense is calculated using the effective-interest amortization method, interest expense (assuming that interest is paid annually) always equals the a. actual amount of interest paid. b. book value of the…

A bond is a direct ownership of a product in a business and a stock is a loan.   Question 15 options:   True   False

while putable bonds are beneficial to the investor when interest rates go down, the downside is that they benefit the issuer when rates go up. True or False? Question 15Answer a. True b. False

Stability deals with the relationship between debt and equity.   Question 18 options:   1) True   2) False

Convertible bonds a. Provide potential benefits only to the issuer.b. Provide potential benefits only to the investor.c. Provide potential benefits to both the issuer and the investor.d. Provide no potential benefits.

Bonds Payable is a type of current liabilities. * True False

Which of the following is NOT a form of long-term debt financing?   Question 19 options:   1)  Bond issue.   2)  Bank term loans.   3)  Accounts Payable.   4)  Leasing.

4. What is the difference between a pass-through mortgage-backed security and a collateralized mortgage obligation security (CMO)?