SIE (Securities Industry Essentials) Practice Exam

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Which of the following pay interest on a semiannual basis?

Treasury bonds
Corporate bonds
Certificates of Deposit
Money Market Funds

The correct answer is: Treasury bonds

Treasury bonds are issued by the government and are typically long-term bonds with a maturity of 10 to 30 years. They pay interest on a semiannual basis, meaning twice a year. Corporate bonds, on the other hand, are issued by companies and may have varying interest payment schedules, such as quarterly or annually, but not necessarily semiannually. Certificates of Deposit (CDs) also have varying interest payment schedules, but they are typically issued by banks and have shorter maturities (less than 5 years). Money Market Funds are a type of investment that invests in short-term, low risk securities such as treasury bills, and do not typically pay interest at all. Therefore, A is the only correct answer for this question.