1. Which of the following statements regarding corporate bonds is most correct? Select one: a. Debentures are riskier than subordinated debentures because they are paid last in the event of bankruptcy. b. Mortgage bonds are riskier than debentures because the value of the asset pledged as collateral may not be sufficient to repay the mortgage. c. The interest rate on subordinated debentures is likely to be higher than the interest rate on debentures. d. Debentures are secured by the asset purchased with the loaned funds. e. None of the above statements is correct.

2. Municipal bonds are typically exempt from federal and state taxes, which means the interest paid on the bonds is not taxable to the issuer. Select one: True False

3. Which of the following statements is most correct? Select one: a. Compared to fixed interest rates, variable rates are riskier for the borrower but less risky for the lender. b. Compared to fixed interest rates, variable rates are riskier for the lender but less risky for the borrower. c. Variable rates are equally risky for the lender and the borrower. d. Variable rate debt never should be used by healthcare organizations because it is too risky. e. Fixed interest rates are more prevalent when long-term borrowing rates are high.

4. Which of the following statements is most correct? Select one: a. The interest rate on a new issue of callable bonds is likely to exceed that on a similar new issue of noncallable bonds. b. The interest rate on a new issue of noncallable bonds is likely to exceed that on a similar new issue of callable bonds. c. Noncallable bonds are riskier to the investor, while callable bonds are riskier to the issuer. d. There is no difference in risk to the investor between similar callable and noncallable bonds. e. The interest rate on a new issue of callable bonds is likely to be equal to that on a similar new issue of noncallable bonds.