Unit 4 - Debt Securities

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The minimum face amount of a negotiable CD is...

$100,000

A bond issued by a Swiss company, sold outside the United States and the issuer's country, but for which the principal and interest are stated and paid in U.S. dollars, is the definition of a...

Eurodollar bond

When interest rates change, the bond with the ______________ duration will have the greatest price change

longest

When a bond is selling at a discount...

nom yield < current yield

define: money market instrument

short-term debt with 1 year or less to maturity

Which debt instrument trades with accrued interest?

Negotiable CDs

The coupon on a bond can be described as its...

nominal yield

what is sovereign debt?

securities issued by national governments (Ex: Treasury Bond from US govt)

In the United Kingdom, they are called gilts. In Germany, they are called Bunds. In France, they are called OATS. To investors, they are known as....

sovereign debt

When a bond is selling at a premium...

CY > YTM

The following is taken from the S&P Bond Guide: FLB Zr 37 87 87½. What is the coupon rate on this bond?

0% (Zr)

The SEC recognizes all of the following under the Credit Rating Agency Reform Act as being registered with the commission to rate debt instruments. Which of them historically has specialized in ratings for the insurance sector?

A.M. Best

equation for current yield of a bond

Annual interest payment/current market price

The industry term "junk bond" applies to a bond with a Standard and Poor's rating no higher than...

BB

The price of what fluctuates the most with a change in interest rates?

Long-term bonds

a bond indenture is also known as a...

deed of trust


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