Exam (elaborations)
CISI Level 3 Introduction to Investment – Bonds Exam Questions and Answers
- Course
- Institution
CISI Level 3 Introduction to Investment – Bonds Exam Questions and Answers
[Show more]
Content preview
CISI Level 3 Introduction to Investment –Bonds Exam Questions and Answers
Bonds are commonly referred to as - Answer -loan stock, debt or fixed interest
securities
Nominal is - Answer -the amount of stock purchased
UK government bonds are known as - Answer -gilts or gilt-edged stock
There are 2 types of government bonds in issue: - Answer -1. conventional
2. index-linked
What is a conventional bond? - Answer -A conventional bond has a fixed coupon and
single repayment date
What is an index linked bond? - Answer -An index linked bond is a bond that has its
coupon payments AND redemption amount adjusted for inflation
When are index linked bonds attractive? - Answer -When a governments control of
inflation is uncertain because they provide protection to the investor
What does it mean to 'strip' a gilt? - Answer -It is broken down into its individual cash
flows which can be traded separately as zero coupon gilts. These are known as gilt
STRIPS
What is a corporate bond? - Answer -A bond which is issued by the company
Conventional bonds represent what percentage of bonds in issue? - Answer -75%
What is the difference between a corporate bond and commercial paper? - Answer -A
commercial paper is a short term debt instrument whereas corporate bonds have a
maturity date of more than 12 months
Most corporate bonds are listed on - Answer -exchanges
Trading of corporate bonds commonly occurs - Answer -OTC - directly between
counterparties
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ALVINK2022. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78310 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now