1. Which of the following bonds should have the highest coupon rate?

A. Treasury bond

B.AAA rated corporate bond

C.BBB rated corporate bond with no call provision

D.BBB rated corporate bond that is callable

2. Which of the following is a TRUE statement about junk bonds?

A. Junk bonds are bonds from companies that are not corporations.

B.Junk bonds have higher yields than Treasury bonds.

C.Junk bonds are the bonds with the lowest yields.

D.Junk bonds are illegal in some states.

E.All of the above

3. Who benefits when a bond issuer calls a bond?

A. Bond holders

B.The bond issuer

C.The borrower

D.Both the bond issuer and the bond holder benefit

E.None of the above

4. Which of the following is a true statement?

A. Bonds are less risky than stocks, they only have default risk.

B.Stocks and bonds carry the same level of risks.

C.Bonds are less risky than stocks but still have price risk, reinvestment risk, and default risk.

D.Stock is less risky than bonds which have price risk, reinvestment risk, and default risk.