Which one of the following is a municipal bond that is secured by the income collected from a specific project?

46.    Which one of the following is a municipal bond that is secured by the income collected from a specific project?

 

A.     agency bond

B.     general obligation bond

C.     development bond

D.     contingency bond

E.     revenue bond

Answer

revenue bond

 

47.    Which one of the following is a municipal bond that is secured by both the revenues from a project and also by the taxing authority of the municipality?

 

A.     mixed bond

B.     general obligation bond

C.     hybrid bond

D.     dual bond

E.     multiple bond

Answer

hybrid bond

 

48.    Which one of the following is a taxable municipal bond used to finance a facility used by a private business?

 

A.     private activity bond

B.     private revenue bond

C.     private corporate bond

D.     private agency bond

E.     private income bond

Answer

private activity bond

 

49.    Which of the following features apply to T-bills?

I. original maturities of 4, 13, or 26 weeks

II. minimum face value of $10,000

III. sold at a discount

IV. semiannual interest payments

 

A.     IV only

B.     I and III only

C.     I and IV only

D.     II and III only

E.     II and IV only

 

50.    Which one of the following statements applies to U.S. Treasury bonds?

 

A.     They have original maturities of 1 to 10 years.

B.     They have a minimum face value of $100,000.

C.     They are zero-coupon securities.

D.     They pay a fixed coupon payment semiannually.

E.     They are adjusted semiannually for inflation.

 

51.    You just purchased a 5-year STRIPS security that was created from a 30-year T-bond. How many payments will you receive?

 

A.     1

B.     10

C.     11

D.     60

E.     61

 

52.    Which one of the following statements related to TIPS is correct assuming an inflationary environment?

 

A.     TIPS have a maturity value of $1,000.

B.     TIPS pay an interest payment based on the latest T-bill rate.

C.     TIPS pay a fixed coupon rate.

D.     The principal amount of a TIPS is adjusted annually for inflation.

E.     The interest rate is adjusted semiannually for inflation.

 

53.    Which of the following statements correctly apply to TIPS?

I. They are quoted as a percentage of the current accrued principal.

II. They pay a variable interest rate that responds to movements in the inflation rate.

III. They are backed by the full faith and credit of the U.S. government.

IV. They adjust for inflation on an annual basis.

 

A.     I and III only

B.     II and IV only

C.     III and IV only

D.     I, II, and III only

E.     II, III, and IV only

 

54.    Which one of the following applies to U.S. Treasury auctions?

 

A.     Every bidder has a choice of submitting either a competitive or a noncompetitive bid.

B.     The purchase price paid by all bidders is the highest bid price.

C.     Each bidder with an accepted bid will pay the individual price he or she bid.

D.     All noncompetitive bids are accepted automatically.

E.     Noncompetitive bids are ignored unless there are not enough competitive bids to buy the entire issue.

 

55.    What price will a noncompetitive bidder pay for a security being purchased through a U.S. Treasury auction?

 

A.     highest competitive bid price

B.     highest noncompetitive bid price

C.     stop-out bid price

D.     average of all bid prices

E.     lowest competitive bid price

 

56.    U.S. government agency bonds pay interest which is subject to which of the following taxes?

 

A.     federal only

B.     state only

C.     state and local only

D.     state and federal only

E.     state, local, and federal

 

57.    Kathy lives in State A and owns a municipal bond issued by State B. The interest earned on this bond is most apt to be exempt from taxation at which of the following levels?

 

A.     local only

B.     state only

C.     federal only

D.     local and state only

E.     federal, state, and local

 

58.    Which one of the following generally applies to municipal bonds?

 

A.     noncallable

B.     risk-free

C.     high credit rating

D.     zero coupon

E.     par value of $1,000

 

59.    A moral obligation bond is which type of a bond?

 

A.     municipal revenue

B.     municipal GO

C.     municipal hybrid

D.     U.S. Treasury

E.     U.S. agency

 

60.    Which of the following uses of proceeds from private activity bonds will most likely qualify those bonds as federally tax-exempt?

I. public airport runway

II. baseball stadium

III. multifamily housing project

IV. mass rail transit

 

A.     I and II only

B.     I and III only

C.     II and III only

D.     II and IV only

E.     I, III, and IV only

                                        

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