Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities in which a borrower promises to pay a specified interest rate and principal at a future date.

The entity that promises to make the interest and maturity payments for a bond issue is called theissuer .

Based on the information given in the following statement, answer the questions that follow:

In July 2009, Walmart sold 100 billion yen of five-year samurai bonds. Lead managers in the deal were Mizuho Securities, BNP Paribas, and Mitsubishi UFJ Securities.

Who is the issuer of the bonds?

BNP Paribas

Mitsubishi UFJ Securities

Walmart

What type of bonds are these?

Corporate bonds

Municipal bonds

Government bonds

Which of the following statements is true about bonds?

When interest rates increase, prices of U.S. Treasuries decline.

When interest rates increase, prices of U.S. Treasuries increase.

Which of the following types of bonds has the least default risk?

Municipal bonds

Treasury bonds

Corporate bonds