formulas

Question 1

Yield as a points

Answer 1

5.35 basis equals a yield of 5.35%

Question 2

convexity measures

Answer 2

a bonds price sensitivity to large changes in market interest rates

Question 3

Duration measures

Answer 3

a bonds price sensitivity to small changes in market interest rates

Question 4

CABS DEBT limit calc

Answer 4

only the discount amount counts towards the debt limit

Question 5

lease rental

Answer 5

equipment

Question 6

Yield by bond type highest to lowest

Answer 6

taxable revenue bonds
taxable go bonds
treasuries
revenue bonds
go bonds

Question 7

529 K-12 expenses

annual limit

Answer 7

10K

Question 8

529 one time expense alotment

Answer 8

10K for student loans and certain apprenticeship programs.

Question 9

NON OID bought in secondary market at a discount

How is gain treated

Answer 9

gain is ordinary income

Question 10

For negotiated offerings, the retail order period is

Answer 10

determined by the issuer and is based on the order size; it

cannot be circumvented.

Question 11

The New Issue Information Dissemination System (NIIDS) requires an underwriter to make any new issue
either

Answer 11

depository or DTC eligible. Therefore, the bonds will be able to be settled via NSCC.

Question 12

The Bond Buyer Municipal Bond Index

Answer 12

published daily updated twice per month

the other indexes are published and updated weekly.

Question 13

If the U.S. budget deficit is rising what is the economic impact

Answer 13

an increase in unemployment rates, rising inflation,

and rising interest rates

Question 14

If the U.S. dollar increases against foreign currencies,

Answer 14

U.S. imports become more competitive and U.S. exports

become less competitive

Question 15

If the U.S. dollar declines against foreign currencies

Answer 15

U.S. imports become less competitive and U.S. exports

become more competitive.

Question 16

tightening money

effect on reserves

Answer 16

causes a decrease in reserves and a decrease in the money supply.

Question 17

• A Municipal Securities Representative is NOT permitted to sell

Answer 17

municipal funds, trusts, or ETFs.

Question 18

Any additional expenses resulting from a close-out must be forwarded to the appropriate party within

Answer 18

n five

business days of the date of execution of the close-out.

Question 19

Customer account information must be maintained for

Answer 19

six years after the account is closed

Question 20

investment objective of speculation.

Answer 20

• An investor whose portfolio consists of high-yield municipal bonds, equity securities, futures, and options

Question 21

time frames for syndicate disclosure of
Allocation?
Priority provisions and reasons for changes, the issuer’s retail order period, and all designations that
are paid out within?

Answer 21

• The syndicate manager must disclose to other members of the syndicate the allocation of bonds within 24
hours, the priority provisions and reasons for changes, the issuer’s retail order period, and all designations that
are paid out within 10 business days of the date of sale.

Question 22

current yield

Answer 22

annual coupon/current price

Question 23

yield to put

Answer 23

all interest and principal amount

Question 24

direct debt

Answer 24

all debt including notes

Question 25

net direct debt

Answer 25

all issues minus self supporting (revenues)

Question 26

total bonded debt

Answer 26

all short and long term debt pluc overlapping debt

Question 27

Municipal Note Interest

Paid

Answer 27

paid at maturity

Question 28

Debt service coverage ratio

Answer 28

net revenue over debt servic

Question 29

triangle

Answer 29

Price > NY > CY > YTM

Question 30

Taxable equivalent Yield

Answer 30

muni yield / (1-tax bracket)

Question 31

Net Yield

Answer 31

Taxable yield * (1 - tax bracket

Question 32

accretion calculation

Answer 32

Multiply offering price by half the YTM then subtract the actual interest received then add the total to the price.
Calculation for the next six months is done the same way only using the new accreted price.

Question 33

diminimus

Answer 33

.25% of the principal multiplied by the number of years to maturity.

Question 34

Under writer assessment

Answer 34

.00275% or .0275 per 1000

Question 35

transactions

Answer 35

.001 or 1 cent per 1000 of par

Question 36

Net interest cost

Answer 36

Total interest divided by bond year dollar amount