Quiz: Do you know how to reap a cash crop with Treasury bonds?
They say that time is money and that knowledge is wealth. So, whether you're a seasoned saver or just getting a plan for your future started, invest your time and test your knowledge about Treasury bonds with this quiz.
What does the credit rating of a bond issuer measure?
a bond issuer's total wealth
a bond issuer's total debt
a bond issuer's financial stability
What is the U.S. government's credit rating?
What is a Treasury bond's primary market?
its primary dealers
its original sale at a U.S. Treasury auction
its highest value in one fiscal year
Which document is most similar to a Treasury bond?
a contract for a deed
a lottery ticket
How are stocks different from bonds?
Bonds only appreciate, whereas stocks may depreciate.
Income from stocks is taxed at a higher rate than income from bonds.
Stocks give you ownership in your investment; bonds do not.
Why is a Treasury bond called a fixed-income investment?
It pays the same amount of interest at every pay period.
Its interest rate is fixed by the government.
It's a good choice for people on a fixed income.
What does an expense ratio compare?
a mutual fund's maintenance costs and its income
a bond issuer's income from sales and payment in interest
the premium and discount rates of different bonds
What's the minimum purchase allowed at a Treasury bond auction?
What's the maximum noncompetitive purchase allowed at a Treasury bond auction?
What's one advantage of having a diversified mutual fund?
It doesn't depend on a single sector of the economy.
It benefits a greater number of people.
It spreads the risk equally among investors.
Who first promoted the idea of "the full faith and credit" of the United States government?
What is quantitative easing?
slowly building a mutual fund's portfolio
a form of bankruptcy by a bond issuer
an increase in Treasury bond sales
Who decides the total value of Treasury bonds to sell at an auction?
the Federal Reserve System
the House Ways and Means Committee
For which goal would buying Treasury bonds be most useful?
funding a child's college education
buying a car at an end-of-the-year clearance sale
paying for a large wedding in two years
How are Treasury bonds different from U.S. savings bonds?
Treasury bonds have a later maturity date than savings bonds.
Minors can buy savings bonds but not Treasury bonds.
Savings bonds are not marketable.
Can you create your own mutual fund?
Yes, if you're a licensed investment adviser.
Yes, if you have the money to invest.
No, only a group of investors can create a fund.
What is a bond coupon?
its maturity date
its interest rate
What is a call provision?
a bidder's right to withdraw a bid before a bond auction closes
an issuer's right to pay back a bond before its maturity date
an announcement that a bond auction is about to close
What is a put provision?
another name for a bid at at a bond auction
an issuer's right to cancel a bond sale
a bondholder's right to repayment in full before the maturity date
What is a broker's inventory?
the bonds he or she has on hand to sell
a network of buyers and sellers he or she regularly uses
bond hunters who locate bonds for a broker's clients