Ch 8-10 Flashcards

1
Q

A ______-end provision in a bond indenture means that additional borrowing against a particular source of revenue is prohibited.

A

Closed

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2
Q

Interest and principal are paid monthly of _____ pass-through certificates.

A

GNMA

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3
Q

GNMA securities are guaranteed by the _____ gov’t.

A

Federal

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4
Q

A holder of convertible debentures is a ______.

A

Creditor

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5
Q

An ______ is a written contract between the issuer of bonds and the trustee under which bonds and debentures are issued.

A

Indenture

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6
Q

______ risk is the greatest risk with mortgage backed securities.

A

Prepayment

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7
Q

Gov’t securities settle next business day. Gov’t sec. accrue interest on ____ days elapsed. (not 30 a month)

A

Actual

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8
Q

______ are purchased to avoid inflation or purchasing power risk.

A

TIPS (Treasury Inflation Protected Securities)

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9
Q

GNMA is subject to ____, _____, and ______ tax.

A

Federal
State
Local

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10
Q

Treasury STRIPS are created when T-____ and T-_____ are stripped of their coupons.

A

Notes

Bonds

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11
Q

T-Bonds selling at a discount have the ____ interest rate risk.

A

Most

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12
Q

Fannie and Freddie bonds are highly dependent on current rates and are suitable for investors seeking ____.

A

Income

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13
Q

The Trust Indenture Act of 1939 relates to the issuance of ____ debt.

A

Corporate

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14
Q

Tombstone ad states the bonds are first ____ bonds.

A

Mortgage

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15
Q

_____ bonds are issued by foreign corporations and govt’s, are dollar denominated securities, and trade in US markets.

A

Yankee

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16
Q

Companion (support) tranche is _____ risk, _____ yield.

A

High

High

17
Q

T-bills mature in __, __, __, and ___ month intervals.

A

1
3
6
12