Study guides, Class notes & Summaries

ABL Ltd. is an Australian company that has financed a joint venture project in Singapore using a 15-year, fixed-rate bond paying semi-annual coupons that are denominated in Singapore dollars. The bond's par value, to be paid at maturity, is denominated in US dollars. This bond is an example of a: global bond. currency option bond. dual-currency bond. C is correct. In a dual-currency bond, coupon payments are denominated in one currency, and the par value is denominated in a different...

Phases of the economic CycleRecovery, Expansion, Peak, Recession, Trough 1. RecoveryAfter the trough, recovery in business confidence, absence of inlfationary pressures, production and raw materials stabilize. Financial Amrkets: Stock market begins to rise, short term interest at minimum, boond interest rates at minimum 2. Expansion"Healthy phase of cycle" grwoth without inflation, Increased Investment, Consumption, Profits, No inflationary pressures. Financial Markets: Stock market on...

ffirmative convenants requirements the issuer must fulfill cross-default covenant states that if the issuer defaults on any other debt obligation, the issuer will also be considered in default on this bond pari passu states that the bond will have the same priority of claims as the issuer's other senior debt issues negative covenants place restrictions on the issuer bullet structure where principal is paid back in a single payment at maturity amortizing loan loan structure in which the...

Fixed Income Test 2 (Answerd) Verified Solution Two factors account for prominence of US Treasuries 1) Volume 2) Liquidity Department of Treasury = largest global single issuer of debt. Most active/liquid market in the world. All Treausury securities are noncallable. Thus, investors are not subject to call risk Marketable Treasury secs fixed-principal securities or inflation-indexed securities Treasury Bills - issued at discount - no coupon - one year or less - return to the inv...

Fixed Income Test 1 (Answered) 2024 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 Higher priority on cash flows Tax deductibility by issuer Infinite Life 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 corre...

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 b...

fixed income test 3 (Answered) Complete Solution delta first-order sensitivity to the price of the underlying asset; positive for calls and increase with moneyness, negative for puts and decrease with moneyness gamma measures how delta changes as spot price increases theta measures time decay of an options value; always negative for calls, usually negative for puts vega sensitivity of an options price to changes in volatility of the underlying asset rho sensitivity of an option price t...

Fixed Income Test 2 (Answerd) Verified Solution Two factors account for prominence of US Treasuries 1) Volume 2) Liquidity Department of Treasury = largest global single issuer of debt. Most active/liquid market in the world. All Treausury securities are noncallable. Thus, investors are not subject to call risk Marketable Treasury secs fixed-principal securities or inflation-indexed securities Treasury Bills - issued at discount - no coupon - one year or less - return to the inv...

Fixed Income Test 1 (Answered) 2022 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 Higher priority on cash flows Tax deductibility by issuer Infinite Life 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 corre...

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 b...