Which of the following is correct regarding bond private placements?

I. Interest rates on privately placed debt tend to be higher than for similar public issues. II. Purchasers of privately placed debt have assets of at least $100 million. III. Once bonds have been privately placed, the original buyers must hold the bonds until maturity.

A. I only B. II only C. I and II only D. II and III only E. I, II, and III

2. A _________ is a Treasury security in which periodic coupon interest payments can be separated from the principal payment and from each other.

A. STRIP. B. T-note. C. T-bond. D. GO bond. E. Revenue bond.

3. Treasury security interest income is ________ and municipal bonds interest income is ________.

A. exempt from federal taxes; exempt from all taxes B. taxable at the state level only; exempt from state taxes only C. taxable at federal level only; exempt from federal taxes D. taxable at the state level; taxed at the federal level E. totally tax exempt; exempt from state taxes

4. A municipalitys standard revenue bonds are

A. backed by the full taxing authority of the municipality. B. collateralized by the earnings from a specific project. C. bonds backed by mortgages. D. backed by the U.S. Treasury. E. always offered with a best efforts offering.

5. All else being equal, the highest required rate of return will be on which of the following bonds?

A. AAA-rated noncallable corporate bond with a sinking fund B. AA-rated callable corporate bond with a sinking fund C. AAA-rated callable corporate bond with a sinking fund D. High investment-grade municipal bond E. AA-rated callable corporate bond without a sinking fund