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Question 1 of 10
1. Question
Which of the following is not a type of treasury security?
Correct
Treasury bills, Treasury bonds and Treasury notes are the three types of treasury securities.
Incorrect
Treasury bills, Treasury bonds and Treasury notes are the three types of treasury securities.
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Question 2 of 10
2. Question
Which of the treasury securities has the longest maturity?
Correct
Treasury bonds, or T-bonds, bear the longest maturity of any of the Treasury securities. T-bonds are issued at par with fixed interest and maturities of greater than ten years.
Incorrect
Treasury bonds, or T-bonds, bear the longest maturity of any of the Treasury securities. T-bonds are issued at par with fixed interest and maturities of greater than ten years.
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Question 3 of 10
3. Question
Which of the following applies to bonds bought at a premium?
Correct
Premiums are amortized (decreased), with the annual amortization amount being subtracted from the investor’s reported income.
Incorrect
Premiums are amortized (decreased), with the annual amortization amount being subtracted from the investor’s reported income.
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Question 4 of 10
4. Question
What is the maturity period for treasury notes?
Correct
Treasury notes are medium-term debt obligations issued by the United States government. Maturity dates range between one and ten years.
Incorrect
Treasury notes are medium-term debt obligations issued by the United States government. Maturity dates range between one and ten years.
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Question 5 of 10
5. Question
Identify the false statement about T-bonds.
Correct
Treasury bonds, or T-bonds, bear the longest maturity of any of the Treasury securities. They have a fixed interest rate, which is determined through a competitive bidding process. Treasury bonds are backed by the full faith and credit of the United States government.
Incorrect
Treasury bonds, or T-bonds, bear the longest maturity of any of the Treasury securities. They have a fixed interest rate, which is determined through a competitive bidding process. Treasury bonds are backed by the full faith and credit of the United States government.
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Question 6 of 10
6. Question
A stock that is held in a company that was not offered as part of an initial public offering is known as:
Correct
Restricted stock is stock that is held in a company that was not offered as part of an initial public offering.
Incorrect
Restricted stock is stock that is held in a company that was not offered as part of an initial public offering.
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Question 7 of 10
7. Question
Which is the following statements is true?
Correct
Gains from investments on municipal bonds are ordinarily not taxed. Taxable municipal bonds can be issued if the purpose of the bond revenue has no clear public benefit, but most municipal bonds are tax-exempt. This means not only that coupon payments are not taxed, but also that gains from original issue discount (OID) bonds are tax-exempt as well. Accretion on the discount of municipal OID bonds is treated as tax-exempt interest income. Discounts on municipal bonds purchased in the secondary market are not even accreted.
Incorrect
Gains from investments on municipal bonds are ordinarily not taxed. Taxable municipal bonds can be issued if the purpose of the bond revenue has no clear public benefit, but most municipal bonds are tax-exempt. This means not only that coupon payments are not taxed, but also that gains from original issue discount (OID) bonds are tax-exempt as well. Accretion on the discount of municipal OID bonds is treated as tax-exempt interest income. Discounts on municipal bonds purchased in the secondary market are not even accreted.
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Question 8 of 10
8. Question
Which of the following bonds is also known as “full faith and credit issues”?
Correct
General obligation (GO) bonds are the first type. These are issued to pay for improvements that benefit a community, but don’t produce income. They are also known as “full faith and credit issues,” because they are repaid from tax revenue raised by the issuing government entity.
Incorrect
General obligation (GO) bonds are the first type. These are issued to pay for improvements that benefit a community, but don’t produce income. They are also known as “full faith and credit issues,” because they are repaid from tax revenue raised by the issuing government entity.
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Question 9 of 10
9. Question
Which of the following stocks is the most volatile of all securities?
Correct
Common stock tends to be the most volatile of all securities, with high gains or losses possible intraday.
Incorrect
Common stock tends to be the most volatile of all securities, with high gains or losses possible intraday.
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Question 10 of 10
10. Question
Each share of equity securities represents:
Correct
Equity securities, most commonly referred to as stocks, are sold as individual shares of a company. Each share represents a certain percentage of ownership in a company. They are issued by the company and sold at an initial offering and on the secondary market thereafter, wherein investors determine the value of the shares in a bid/ask manner.
Incorrect
Equity securities, most commonly referred to as stocks, are sold as individual shares of a company. Each share represents a certain percentage of ownership in a company. They are issued by the company and sold at an initial offering and on the secondary market thereafter, wherein investors determine the value of the shares in a bid/ask manner.