Questions from General Investment

Q: What is the difference between the following? a) A

What is the difference between the following? a) A bond secured by a moral obligation and a bond secured by full faith and credit b) A revenue bond and a general obligation bond Are there any similari...

Q: What are the sources of risk from investing in the following?

What are the sources of risk from investing in the following? a) Federal government debt b) Municipal debt

Q: What is the difference between a term bond issue and a serial

What is the difference between a term bond issue and a serial bond issue? Why are many capital improvements made by state and local governments financed through serial bonds?

Q: What is a mortgage pass-through bond? What risks are

What is a mortgage pass-through bond? What risks are associated with investing in Ginnie Mae bonds? What is the composition of the payment received from a mortgage pass-through bond?

Q: If interest rates increase, what should happen to the following?

If interest rates increase, what should happen to the following? a) The price of a Ginnie Mae bond and the price of a municipal bond b) The payments received from a Ginnie Mae bond and the payments re...

Q: Identify which government securities may be appropriate for the following investors:

Identify which government securities may be appropriate for the following investors: a) A retired couple seeking income b) An individual in the highest tax bracket seeking a liquid investment c) An in...

Q: Why is the debt of the federal government considered to be the

Why is the debt of the federal government considered to be the safest of all possible investments?

Q: You sell a 6 percent $10,000 bond for $

You sell a 6 percent $10,000 bond for $9,180 plus $156 in accrued interest for a total of $9,336. Soon thereafter the company makes a $300 interest payment. You are in the 20 percent income tax bracke...

Q: How is the value of a convertible bond in terms of stock

How is the value of a convertible bond in terms of stock determined? What effect does this conversion value have on the price of the bond?

Q: A $1,000 bond has a coupon rate of 8

A $1,000 bond has a coupon rate of 8 percent and matures after ten years. a) What is the current price of the bond if the comparable rate of interest is 8 percent? b) What is the current price of the...