BUSN 380 DEVRY COMPLETE QUIZ PACKAGE

Question 15. Question : (TCO 5) Nancy Groom owns one $1,000 corporate bond issued by Chevron.
The bond has a yield of 10% and pays 8% interest semiannually. How much interest will Ms. Groom
receive in 1 year?
$50
$100
$80
$40
$1,000
Question 16. Question : (TCO 5) Which of the statements below is false?
Stock is a form of equity capital.
Stock does not have a maturity date.
Bonds are a form of debt capital.
Bonds do not have to be repaid at maturity.
Interest payments are made to bondholders.
Question 17. Question : (TCO 5) All of the statements are false except for which?
Convertible corporate bonds are more secure than government bonds.
Convertible bonds often pay 3–4% more interest than nonconvertible bonds.
Because of the conversion feature, it is not necessary to evaluate convertible corporate bonds.
Even if convertible bondholders convert their investment to common stock, the bondholders still
receive interest payments.
In reality, there is no guarantee that bondholders will convert to common stock even if the market
value of the common stock does increase in value.
Question 18. Question : (TCO 5) You have been thinking about investing in corporate bonds, but are
seeking the most secure bond investment possible. Most likely, you would want to select _____ bonds.
debenture
subordinated
indenture
convertible
mortgage
Question 19. Question : (TCO 5) A(n) _____ fund is a fund to which annual or semiannual deposits are
made for the purpose of redeeming a bond issue.
serial
indenture
debenture
sinking
money