Unit 4 - Debt Securities
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
