Exercise

Fill in the blank or answer true or false

1. A bond in which the entire issue is scheduled to reach maturity on the same date and offers a single interest rate is called a _____ bond.

2. A _____ bond has maturities that are staggered in equal installments over a specific time period.

3. The issuer makes periodic payments into a _____ to be assured that the issuer will have the required funds when the principal comes due.

4. True or false. Serial bonds are often sold and marketed in strips at differing maturities.

5. True or false. A municipal bond’s YTM will equal its coupon rate when the bond is sold at par.

6. True or false. When a municipal bond is sold at a discount, its YTM will be higher than its coupon rate.

7. True or false. When a bond is quoted, it is quoted at its dirty price.

8. When a municipal bond is traded, it is traded at its _____ price.

9. A price which does not include accrued interest is called the _____ price.

10. Interest on municipal bonds is paid _____.

11. True or false. For boo