HESI A2: Physich (Quiz 3)

As defined in the Securities Exchange Act of 1934, the term municipal security would include all of the following EXCEPT

Municipal bonds are often called tax-exempts. This refers to the exemption of their income from

Kate, age 59, has an investment portfolio exceeding $250,000. She considers herself a moderate to conservative investor. To generate additional income, she is anticipating adding bonds to her portfolio. She lives in a state that does not have an income tax and she is in the 28% federal income tax bracket. Which of the following bonds would be the best recommendation for her portfolio?

A client in the 28% marginal federal income tax bracket invests in a corporate bond with an 8% coupon. To calculate the client's after-tax rate of return,

Your client in the 25% federal income tax bracket lives in a state where his earnings place him in the 6% bracket for state income tax purposes. If he were to purchase a 4% bond issued by a political subdivision of his state, his total tax-equivalent yield would be

Your client in the 35% federal income tax bracket currently owns some corporate bonds with a coupon yield of 7%. In order to receive the same income after taxes, he would need to buy municipal bonds with a coupon of

Which of the following choices offers the highest tax-equivalent yield?

Which of the following investments would provide the highest after-tax income to your client in the 35% federal income tax bracket?

When a corporation domiciled in the U.K. issues U.S. dollar-denominated bonds in the United States, it is issuing

An investor interested in investing in sovereign debt would most likely purchase

Which of the following statements represents an advantage of a municipal general obligation bond over a revenue bond?

Which of the following would best describes a Yankee bond?

Which of the following would best describe a Yankee bond?

Of the following securities, which is most commonly recommended to fund a child's college education?

The call feature available on some bonds

If a corporate bond is a convertible bond, this means that

Which of the following statements regarding callable bonds is correct?

Which of the following statements regarding convertible debentures is TRUE?

A U.S. dollar-denominated bond issued by a non-American company (or government), sold outside the United States and the issuer's country, but for which the principal and interest are stated and paid in U.S. dollars is best described as

When a U.S. resident investor purchases foreign bonds,

If your customer wants to set aside $40,000 for when his child starts college, but does not want to endanger the principal, you should recommend

The term "eurodollars" refers to

Which of the following investments gives the investor the least exposure to reinvestment risk?

Your customer owns $100 par 5½% callable convertible preferred stock convertible into 4 shares of common stock at $25. What should she be advised to do if the board of directors were to call all the preferred at 106 when the common stock is trading at $25.50?

An investor interested in acquiring a convertible bond as part of his investment portfolio would