Ch 8-10 Flashcards
A ______-end provision in a bond indenture means that additional borrowing against a particular source of revenue is prohibited.
Closed
Interest and principal are paid monthly of _____ pass-through certificates.
GNMA
GNMA securities are guaranteed by the _____ gov’t.
Federal
A holder of convertible debentures is a ______.
Creditor
An ______ is a written contract between the issuer of bonds and the trustee under which bonds and debentures are issued.
Indenture
______ risk is the greatest risk with mortgage backed securities.
Prepayment
Gov’t securities settle next business day. Gov’t sec. accrue interest on ____ days elapsed. (not 30 a month)
Actual
______ are purchased to avoid inflation or purchasing power risk.
TIPS (Treasury Inflation Protected Securities)
GNMA is subject to ____, _____, and ______ tax.
Federal
State
Local
Treasury STRIPS are created when T-____ and T-_____ are stripped of their coupons.
Notes
Bonds
T-Bonds selling at a discount have the ____ interest rate risk.
Most
Fannie and Freddie bonds are highly dependent on current rates and are suitable for investors seeking ____.
Income
The Trust Indenture Act of 1939 relates to the issuance of ____ debt.
Corporate
Tombstone ad states the bonds are first ____ bonds.
Mortgage
_____ bonds are issued by foreign corporations and govt’s, are dollar denominated securities, and trade in US markets.
Yankee