Fixed Income Securities: Defining Elements

4 Nuggets | 1 Quiz Fixed-Income Markets: Issuance, Trading, and Funding

6 Nuggets | 1 Quiz Introduction to Fixed-Income Valuation

5 Nuggets | 1 Quiz Introduction to Asset-Backed Securities

6 Nuggets | 1 Quiz Understanding Fixed-Income Risk and Return

7 Nuggets | 1 Quiz Fundamentals of Credit Analysis

8 Nuggets | 1 Quiz This post lesson quiz is to help anchor what you have just learnt and to give you some practise. The questions may not be structured like the kind you are likely to get in the exam.

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- Question 1 of 13
##### 1. Question

*Bond Prices and Time Value of Money*A 7-year, $1000 par, semi-annual pay 8% fixed coupon bond has a market discount rate of 6% with 2 years to maturity. What is the market price of the bond closest to?

CorrectIncorrect - Question 2 of 13
##### 2. Question

*Bond Prices and Time Value of Money*Kennedy is choosing between bonds A and B. Both bonds have the same time to maturity and are trading at the same yield. Bond A has a lower coupon rate while Bond B has a higher coupon rate. Which of the 2 bonds should Kennedy choose, given that he has a preference for a bond with lower price volatility as he intends to sell the bond in the short term.

CorrectIncorrect - Question 3 of 13
##### 3. Question

A 7% annual fixed coupon bond has 3 years to maturity.

Given the following spot rates, calculate the price (per 100 par) that the bond should be trading at.

**Spot Rates**

1 yr: 6.6%

2 yr: 7.1%

3 yr: 7.3%CorrectIncorrect - Question 4 of 13
##### 4. Question

*Bond Prices: Quotes and Calculations*A $1000 par 10% semi-annual fixed coupon bond with has exactly 2 years to maturity and the coupon has just been paid. The market discount rate of the bond is 8%. Calculate the price of the bond.

CorrectIncorrect - Question 5 of 13
##### 5. Question

*Bond Prices: Quotes and Calculations*~ continued from previous question

$1000 par 10% semi-annual fixed coupon bondThe price of the bond was $1036.30 at the last coupon payment date and that 43 days have passed since the coupon payment, calculate the full price of the bond given the the market discount rate remains at 8%.

(Assume 183 days per half year)CorrectIncorrect - Question 6 of 13
##### 6. Question

*Bond Prices: Quotes and Calculations*~ continued from previous question

$1000 par 10% semi-annual fixed coupon bondThe full price of the bond is $1045.89, 43 days after the last coupon payment. Calculate the flat price of the bond.

(Assume 183 days per half year)CorrectIncorrect - Question 7 of 13
##### 7. Question

*Bond Prices: Quotes and Calculations*An analyst wishes to determine the fair value of a BB-rated bond that is not publicly traded. The $1000 par bond has 3 years to maturity, and annual coupon of 7%.

The analyst has found 2 comparable BB-rated bonds to perform a matrix pricing to determine the bond’s value.

Comparable Bond A (5 years to maturity, YIELD-TO-MATURITY 8.7%)

Comparable Bond B (2 years to maturity, YIELD-TO-MATURITY 7.4%)Use the interpolation method to determine a fair value for the bond.

CorrectIncorrect - Question 8 of 13
##### 8. Question

*Bond Yield Measures*A fixed 6% quarterly-pay coupon bond with 5.5 years to maturity is trading at 98.6 per 100 par.

What is the effective yield of the bond?

CorrectIncorrect - Question 9 of 13
##### 9. Question

A 10-year, 8% semi-annual fixed coupon callable bond can be called after 5 years from issuance at a call price of 101.

2 years after its issuance, the price of the bond has dropped to 97 per 100 par. Calculate the yield-to-call at this point.

CorrectIncorrect - Question 10 of 13
##### 10. Question

*Bond Yield Measures*A $1000 par floating rate note pays a coupon rate of 180-day LIBOR plus a quoted margin of 1.5% semi-annually. Given that there is exactly 2 years to maturity, and the latest 180day LIBOR is 2.8%, and the discount margin is 1.0%, what is the value of the FRN at this point?

CorrectIncorrect - Question 11 of 13
##### 11. Question

*Maturity Structure of Interest Rates*Given the following spot curve, calculate the 2y1y forward rate.

1-yr spot rate (S1): 3.6%

2-yr spot rate (S2): 3.9%

3-yr spot rate (S3): 4.2%

4-yr spot rate (S4): 4.3%CorrectIncorrect - Question 12 of 13
##### 12. Question

*Yield Spreads*Match the following benchmarks to the spread (drag and drop).

##### Sort elements

- Spread over the interpolated 6.5-year US treasury bond yield
- Spread over the 5-year Euro swap rate
- Spread over the 3-year "on-the-run" US T-note yield

- G-Spread
- I-Spread
- Benchmark spread

CorrectIncorrect - Question 13 of 13
##### 13. Question

*Yield Spreads*A callable bond has a Z-spread of 280 bp and the value of the call option is 80 bp. What is the Option-Adjusted Spread of the bond?

CorrectIncorrect

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