This 12:10 seconds YouTube video talks about the features of an I Bond and how an investor can successfully add it to their financial portfolio. It gives students further options discussed in LO # 7.3 in the Grable text

https://www.youtube.com/watch?v=EaK4Ik6Umxw

Multiple Choice Questions

1. What is a hurdle rate when it comes to holding a bond?

• The hurdles one goes through when purchasing a bond
• The hurdle rate refers to the rate earned on a bond when factoring in inflation and fees paid to the financial advisor
• The hurdle rate refers to the after-tax rate earned on a bond
• The hurdle rate refers to the rate earned on a bond before inflation

2. An I Bond is a

• Inflation adjusted bond
• Interest bearing bond
• Issued by the US Treasury
• All the above

3. Which of the following statement is false when it comes to the I Bond?

• It has a fixed rate element only
• It has a fixed rate and inflation rate element
• This bond has no interest rate risk
• The current rate applies to the first 6 months

4. When it comes to the fixed rate element of the I Bond which statement is true?

• The fixed rate element changes every 6 months
• The fixed rate element is adjusted to inflation
• The fixed rate element does not change
• The fixed rate element is currently .25%

5. Which is the easiest way to purchase an I Bond?

• Purchase it from your bank
• Purchase it from TreasuryDirect. Gov
• Purchase it from your trusted financial advisor
• Purchase it from any e trade website

6. Paper I Bonds are sold in all the following denominations except one. Which one is not one of the denominations?

• $50
• $600
• $100
• $500

7. Which one of the following statements is FALSE when it comes to taxation of, I Bonds?

• Interest accumulates within the I Bonds
• Interest is federally taxed not state or locally
• Interest can be paid yearly or when the bond is redeemed
• Interest is paid on the state and local level but not federally

8. When cashing in an electronic I Bond

• It must be done with a minimum amount of $25 and must be in 1 cent increments
• One must leave at least $50 in the account
• One must collect the entire interest even when partially redeeming the bond