Fixed Income Review Test and Quizzes (Answered) Verified Solution
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Fixed Income
Institution
Fixed Income
Fixed Income Review Test and Quizzes (Answered) Verified Solution
The US debt market is larger than the US equity market? (T/F)
TRUE
All of the following are differentiating factors of fixed income securities versus equity securities except for:
-Fixed claim
-Infinite Life
-Tax deductibilit...
fixed income review test and quizzes answered verified solution the us debt market is larger than the us equity market tf true all of the following are differentiating factors of fixed income s
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Fixed Income Review Test and Quizzes
(Answered) Verified Solution
The US debt market is larger than the US equity market? (T/F)
TRUE
All of the following are differentiating factors of fixed income securities versus
equity securities except for:
-Fixed claim
-Infinite Life
-Tax deductibility by user
-Higher priority on cash flows
Infinite Life
A bond's CUSIP is defined as:
A) A unique nine digit number to identify individual bonds
B) A number assigned by the SEC to all registered bond offerings
Only A is correct
All of the following are differences in how bond trade versus equities except:
-Equities generally trade at a wider spread differential
-Bonds trade in a more opaque market (less pricing data readily available)
-Equities tend to more often be traded on electronic exchanges
-Minimum trading sizes for equities are smaller
Equities generally trade at a wider spread differential
In terms of returns, bond investors who buy and intend to hold a bond to maturity
are primarily focused:
A)Price appreciation
B)Principal return and income yield
Only B is correct
All of the following are examples of Fixed Income asset classes except:
-Convertibles
-Interest Rate Options
-RMBS
-High Yield
Interest Rate Options
A bond's indenture:
-Contains its covenants
-relates only to its interest and principal payments
-is the same as a debenture
Contains its covenants
Which of the following bond covenants is most accurately described as an
affirmative covenant? The bond issuer must not:
-issue more debt with the same or higher seniority
-violate laws or regulations
-sell assets pledged as collateral
violate laws or regulations
, A pure-discount bond:
-always sells at par
-pays interest on a regular basis (typically semi-annually)
-does not pay interest on a regular basis
does not pay interest on a regular basis
Which of the following statements is most accurate with regard to floating-rate
issues that have caps and floors?
-A floor is an advantage to the bondholder, while a cap is an advantage to the
issuer
-A cap is an advantage to the bondholder, while a floor is an advantage to the
issuer
-A floor is an advantage to both the issuer and the bondholder, while a cap is a
disadvantage to both the issuer and the bondholder
A floor is an advantage to the bondholder, while a cap is an advantage to the issuer
For a fixed income new issuance, a prospectus typically contains this piece of
information not found in the indenture
-Maturity date
-Coupon rate
-Call price
-Overview of issuer's business
Overview of issuer's business
Another term for a bond's maturity is
-par value
-duration
-tenor
tenor
All of the following are examples of types of issuers of fixed securities except:
-Government
-Corporate
-CUSIP
-SPV/SPE
CUSIP
All of the following terms are synonymous with non-investment grade debt
accept:
-Junk bonds
-High yield
-BBB Bonds
BBB Bonds
Which item below ranks investment grade ratings from the highest credit quality
first to the lowest credit quality last.
-BB+,BB,A,AA,AAA
-AAA,AA,A,BBB
-BBB,BB+,A,AA,AAA
-AAA,AA,A,BBB,BB+
AAA, AA, A, BBB
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