Introduction to Business

Section 1: Bonds

Self-Checks

1
Using money to participate in an enterprise that offers the possibility of profit is called ________ .
A)investing
B)risk
C)security
D)trading
2
The return on an investment is the amount of money the investment earns, or the ________ .
A)commission
B)interest
C)payout
D)yield
3
A tradable document that shows evidence of debt or ownership is called a ________ .
A)bond
B)share of stock
C)security
D)stock option
4
A(n) _________ is a certificate issued by a government or company in which it promise to pay back borrowed money at a fixed rate of interest on a specified date.
A)bond
B)coupon
C)option
D)T-bill
5
The rate of interest on a bond is called the ________ .
A)bond rate
B)coupon rate
C)discount rate
D)interest rate
6
The difference between the amount you pay for a bond and the bond's face value is the ________ .
A)bond discount
B)bonus
C)commission
D)yield
7
Treasury bills are sold in units of $1,000 and on the maturity date the investor receives________ .
A)$1,000
B)$1,000 plus interest
C)the full face value
D)the face value less a commission
8
Treasury _________ are issued in $1,000 units, with a maturity of 30 years.
A)bills
B)bonds
C)notes
D)stocks
9
A bond issued by a state government is called a _________ bond.
A)local
B)municipal
C)regional
D)state
10
A bond issued by a corporation is called a ________ .
A)corporate bond
B)market share
C)stock option
D)share of stock
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