Final exam 4 Flashcards
bond buyer visible supply is comprised of
The visible supply reflects all municipal bonds that are expected to be brought to market within the next 30 days. It’s computed daily and includes all competitive and negotiated offerings that are anticipated to be brought to market. However, it doesn’t include short-term notes.
Given an inverted yield curve, what happens to short and long term rates
In an inverted yield curve, short-term rates are higher than long-term rates. Both short-term and long-term rates are higher than usual and are expected to decrease.
municipal bond backed by an insurance company has gone into default. The insurance carrier will provide:
The interest payments as they come due and the principal at maturity
Principal review of municipal transactions
Each transaction in municipal securities must be reviewed and approved by a designated principal on a daily basis. There is no exception for a transaction executed for a sophisticated municipal market professional.
The Federal Reserve Board’s Open Market Committee (FOMC) buys and sells which of the following securities most often to accomplish its aims?
Treasury bills
commission =
agency
The senior syndicate manager of a new municipal bond offering is required to provide written disclosure to the other members of the syndicate of the amount of any portion of the takedown that is directed to each member of the syndicate by the issuer within:
15 business days
After sending the commitment wire, the senior syndicate manager must complete the allocation of securities.
within _____ hours
24
from the date of sale, the syndicate manager must provide written disclosure to the syndicate members to indicate the allocation of securities to orders which, under the priority provisions that are adopted by the syndicate, were entitled to a higher priority than a member’s takedown order.
Within ____ business days
2 business days
following the date of sale, the syndicate manager must provide written disclosure to each syndicate member all of the details regarding the available information on designations that are paid to syndicate and nonsyndicate members, which is expressed in total dollar amounts
Within _____ business days
10
When pursuing a tight money policy, the Fed would
sell securities to primary dealers, which would drain bank reserves.
this also increases interest rates.
Time of Formal Award
The later of the time the contract to purchase the securities is executed or the time the issuer notifies the underwriter of its execution of the agreement
An investor purchasing a variable-rate demand obligation seeks:
Capital preservation if interest rates rise
Trades done at par are not subject to
yield disclosure requirements. For trades done at par, the dollar price is shown as well as the number of bonds purchased, information pertaining to call features, and the total money due from the transaction.
out firm quote
the dealer is locked in the quote usually a specified period of time and a portion may be sold.
