Corporate Bonds and Stocks Quiz

Which is a corporate IOU?

Which one gives you an ownership, or “share,” in a company?

Which one is offered by the U.S. government as well as by private corporations?

Government bonds and corporate stocks are

Which bond will usually pay a higher interest rate?

Which bond will usually pay a higher interest rate?

Which bond will usually pay a higher interest rate?

Suppose you’d like to invest in a company and you’ve narrowed your choice down to three firms: Company A is offering a zero-coupon bond with a face value of $1000 to be repaid in 1 year for $963. Company B has the same face value and maturity date but sells for $871. And company C also has the same face value and maturity but sells for $985. In which would you rather invest?

How do government bonds differ from corporate bonds?

What is the primary purpose of a stock exchange?