Fixed Income Study guides, Class notes & Summaries

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 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 Securities Test 1 (Answered) Complete Solution Fixed income securities can also be referred to as? debt securities and bonds a fixed income security is a __________ obligation debt What is the largest subset of financial markets? global fixed income markets global fixed income markets is the largest by what criteria? - number of shares - market capitalization In 2010 global fixed income markets were ____ times larger than global equity markets? 3 In fixed income market...

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 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 Securities Test 1 (Answered) Complete Solution Fixed income securities can also be referred to as? debt securities and bonds a fixed income security is a __________ obligation debt What is the largest subset of financial markets? global fixed income markets global fixed income markets is the largest by what criteria? - number of shares - market capitalization In 2010 global fixed income markets were ____ times larger than global equity markets? 3 In fixed income market...

Fixed Income Securities Test 2 (Answered) Complete Solution Assume you purchased Treasury bond on November 14, with an annual coupon rate equal to 15%. At settlement you must pay accrued interest equal to $2.51. Assuming there are 182 days in a coupon period, how many days were in the AI period? Coupon of 15% = $15 per $100 of par Coupon interest per day = 15 / 364 = .0412 $2.51 / .0412 = 61 days Which of the following statements is FALSE? - all coupon treasury security can be created ...