Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Securities > Asset Classes - Debt types & features > Flashcards

Asset Classes - Debt types & features Flashcards

You may prefer our related Brainscape-certified flashcards:
SIE Exam flashcards
1
Q

What is a method of raising mezzanine debt?

A

Issuing payment in kind notes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Index-linked gilts

A

Both the coupon and the redemption value are index-linked

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

When creating an asset-backed security, to keep the instrument off-balance sheet, which of the following is used?

A

SPV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the order of priority in a winding-up?

A

Debentures. Guaranteed bond. Subordinated loan stock. Ordinary shares.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Which pay interest semi-annually?

A

US Tbonds

JGBs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Who are municipal bonds best suited for?

A

US investors living in the issuing state

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Credit enhancements are

A

tools used by an issuer to enable bonds to be more highly-rated.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Which of the following is the most common form of security for debentures?

A

Fixed charge over property.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Which of the following asset classes can be broken into tranches offering different levels of risk and return?

A

Mortgage-backed securities

Collateralised debt obligations.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What does the term mezzanine capital refer to?

A

Unsecured high-yield debt that represents a claim on a company’s assets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

When a government bond is stripped

A

the income streams are treated as separate securities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

In relation to the international government bond market

A

Bobls are German bonds paying annual coupons

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Which of the following corporate debt securities is secured against a particular asset of a company?

A

Fixed charge

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Which of the following is least likely about bonds

A

Prices are typically quoted dirty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Inters rates on index-linked gilts are linked to

A

Retail price index

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

If the credit rating on a corporate bond is upgraded

A

coupon will remain the same and the prices will rise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Bonds issued by US Treasury

A

coupons are paid semi-annually

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Asian Development Bank

A

would issues supranational bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

CCC

A

represents the credit rating of a non-investment grand bond

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

The different yields between conventional and index-linked gilts may be viewed as reflecting

A

long-term inflation rates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Schatz

A

life of less than 5 years when issued

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Patrick observes that the effective price per share from a convertible bond is lower than the current market price of the underlying shares. how can he profit from this observation?

A

Buy the convertible and sell the underlying shares.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Zero-dividend preference shares

A

are paid out first on a liquidation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Stripped government bonds

A

Zero coupon

Tradable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Payment in kind notes are issued with

A

Mezzanine debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

CREST

A

is not permitted to strip a gilt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

German bunds settle

A

T+2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Bearer document

A

sterling ond issued in the US, China and throughout the Eurozone

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

A company could issue bonds in order to satisfy the needs of investors that wish to invest in it, with the coupon rate and maturity set according to market demand. This is an example of

A

Medium term notes

30
Q

Bobls

A

Issued by the German government

Maturity of 5 years.

31
Q

Where a bond issuer has set aside a certain amount each year to buy back a certain number of bonds which are deemed callable they would have set up a

A

Sinking fund

32
Q

French bonds settle

A

T+2

33
Q

US T Bonds settle

A

T+1

34
Q

JGB settle

A

T+1

35
Q

Medium-term notes generally have a life to maturity of

A

2-10 years.

36
Q

A guaranteed bond of a company is generally guaranteed by

A

a company in the same group

37
Q

Convertible bond

A

similar to purchasing a non-convertible bond and being long an American style stock option

38
Q

Convertible bond

A

may be in a different currency to the converted shares

39
Q

Convertible bond

A

acts an option to purchase shares in the issuing company at the discretion of the buyer

40
Q

JGB

A

paid semi annually

41
Q

JGB

A

repayable on specific date
common maturity of 10 years
either register or bearer

42
Q

French OAT

A

pays annual coupon

43
Q

Bobls have a life of

A

3-5 years

44
Q

German government bonds

A

Bund and Bobl

45
Q

10 year strippable government bond can be stripped into

A

21 individual strips

46
Q

Freddie Mac

A

Federal home loan mortgage corporation

47
Q

Effect on price of convertible loan stock if share prices fall

A

Price of convertible falls

48
Q

US local government bonds are also known as

A

municipal bonds

49
Q

Repo rate

A

derived from gilt sale and repurchase

50
Q

US Bonds

A

Registed

Not issued with a zero-couon

51
Q

Bobl

A

German govt bond with maturity of 3 and 5 years.

52
Q

BBB-

A

lowest S&P rating for investment grade debt

53
Q

Index linked government bonds

A

Pay a low coupon
Coupon varies with inflation
Range of maturities are available

54
Q

Eurobonds

A

Fixed coupon

Bearer form

55
Q

Vanilla convertible bond usually pays

A

fixed coupon

56
Q

Immobilisation

A

placement of bearer securities with a centralised depository

57
Q

JGB issued with a maturity of

A

10 years

58
Q

Mezanine debt

A

carries a greater degree of risk than subordinated debt

59
Q

A bond which has just defaulted on a coupon payment would be rated by S&P as

A

D

60
Q

During a period of zero inflation what is the impact on the coupon of an index-linked gilt?

A

The coupon will be unadjusted in that period

61
Q

In relation to seniority where would mezzanine debt be placed?

A

Above preference shares and below subordinated debt

62
Q

Why would a company prefer to issue a convertible bond rather than issue shares to finance a takeover?

A

To benefit from lower initial servicing costs

63
Q

Which of the following is not an issuer of mortgage-backed securities in the US?

A

Government Home Mortgage Corporation

64
Q

Holders of subordinated debt rank above which of the following instruments?

A

Preference shares

65
Q

According to the credit ratings agency Moody’s what credit rating would be issued to a bond in default?

A

C

66
Q

Which of the following best describes a mortgage-backed security?

A

Bonds created when a group pf mortgage loans are pooled together to be sold to investors.

67
Q

TRAX

A

system for reporting eurobond trades

68
Q

Clean price of a gilt means

A

excluding accrued interests

69
Q

What would a bond spread normally be described as?

A

Difference between the bond’s yield and the yield on a benchmark gilt

70
Q

The life of an OAT is typically

A

2-50 years

71
Q

JGB settle

A

T+1

72
Q

Which of the following might describe the difference between government expenditure and revenue?

A

The deficit

Securities (19 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions