Debt Flashcards
Term bonds all have the same _____ and _____
interest rate and maturity
Serial bonds have different _____ and _____
interest rates and maturities
Series bonds have the same _____ but different _____
same dates of maturity but different dates of issuance
Term bonds are quoted on a ______ basis
percentage of par (dollar bonds)
Corp bonds are quoted at a minimum of ____, while gov’t bonds are quoted at a minimum of ____
1/8th; gov’t at 1/32nd
Serial bonds (munis are typically serial bonds) are quoted on a ______ basis
yield
The approx. price of a bond quoted on a yield basis is =
= coupon / basis
The most volatile bonds in regards to interest rate movements are ________
long term, zero coupon bonds
For zero coupon bonds, the duration is equal to the ______
time to maturity
The nominal yield is the stated rate of _____ on the bond
state rate of interest
The current yield takes into account the _____ of the bond, and is calculated as =
market price, calculated as = income / mkt price
The yield to maturity takes into account the market price of the bond as well as any ______ or ______
discount or premium
YTM =
= (annual income +/- discount/premium) / ((purchase price + redemption price)/2)
Call protection is typically ______
10 years
Call prices tend to set a _____ for bond prices as interest rates _____
set a ceiling as interest rates fall
Zero coupon bonds are called at the current _______ plus a call premium
accreted value
Put features set a ____ for bond prices when interest rates are _____
set a floor when interest rates are rising
For a discount bond, the YTC is _____ than the YTM
Greater
For a premium bond, the YTC is _____ than the YTM
less
Moody’s ratings for commercial paper are _____-
P1, P2, P3, NP
Moody’s ratings for municipal notes are ______
MIG 1, MIG 2, MIG 3, SG
The only bonds that avoid reinvestment risk are ____-
zero coupon bonds
An expanding spread of the yield curve indicates an impending _____
recession
A registered to principal only bond has the _____- registered to the owner but the bond still has _____
principal is registered to the owner, but the bond still has bearer coupons