Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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1. Types of bonds
Fixed-income securities consist of debt instruments and preferred stock . Bonds are debt securities in which a borrower promises to pay a specified interest rate and principal at a future date.
A. Which of the following statements about Treasury bonds is the most accurate?
Treasury bonds have a very small amount of default risk, so they are not completely riskless.
Treasury bonds are completely riskless.
Treasury bonds are not completely riskless, since their prices will decline when interest rates rise.
B. Based on the information given in the following statement, answer the questions that follow:
In July 2009, Hungary successfully issued 1 billion euros in bonds. The transaction was managed by Citigroup.
Who is the issuer of the bonds?
The Hungarian government
Hungary Bank
Citigroup
C. What type of bonds are these?
Municipal bonds
Corporate bonds
Government bonds
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