Securities 3

Question 1

Eurodollar deposits

Answer 1

US dollars invested outside of the US

Generally higher risk than US deposits

Question 2

Euro bonds

Answer 2

Any issuer issuing bonds outside the country of origin
Payable in any currency (except US dollars)
Currency risk for US investors

Question 3

Eurodollar bonds

Answer 3

Any issuer except the US
Payable in US currency
No currency risk for US investors

Question 4

Money markets

Answer 4

Generally high quality
One year or less to maturity
Highly liquid

Question 5

General Obligation Bonds (GOs)

Answer 5

Backed by issuing municipality (taxes)
Voter approval required
May be subject to statutory debt limits
Underwritings generally competitive bid
Analysis based on tolerance to taxes, debt statement, and debt ratios

Question 6

Revenue bonds

Answer 6

Backed by user fees (self-supporting)
Voter approval not required
May be subject to additional bonds test
Underwritings generally negotiated
Analyiss based on feasibility studies and debt service coverage ratio

Question 7

Limited tax bond

Answer 7

Issued when issuer’s ability to raise taxes is limited

Question 8

Double-barreled bond

Answer 8

Bond issue debt funded by project revenue but backed by issuers full faith and credit (taxes)

Question 9

Industrial development revenue bonds

Answer 9

Backed by corporations with lease back payments made to issuer

Question 10

Special tax bonds

Answer 10

Backed by taxes other than real estate

ex.) alcohol and tobacco taxes

Question 11

Special assessment bonds

Answer 11

Only assess property owners who benefit from the bond issue

Question 12

Moral obligation bonds

Answer 12

Legislative authority is required to pay back bond holders if revenues are insufficient

Question 13

Public and New Housing Authority bonds (section 8)

Answer 13

Bonds provide financing for low and moderate income housing and are backed by the full faith and credit of the US government

Question 14

Anticipation notes

Answer 14

Short term borrowing in advance of receiving funds from long term debt; ex.) tax, revenue, bond and grant anticipation notes

Question 15

Found in daily bond buyer GO index

Answer 15

20 specific GO bonds each with 20 year maturities

Question 16

Found in daily bond buyer Revdex

Answer 16

25 specific revenue bonds each with 30 year maturities

Question 17

Found in daily bond buyer 30 day visible supply

Answer 17

Total par value of all new municipals to be offered in the next 30 days

Question 18

Found in daily bond buyer placement ratio

Answer 18

Total par value of all municipals sold/total par value of all municipals offered within the previous week

Question 19

Municipal taxation- Federal level

Answer 19

exempt

Question 20

Municipal taxation- state level- in state investor

Answer 20

exempt

Question 21

Municipal taxation- out of state investor

Answer 21

Taxable

Question 22

Premium amortize

Answer 22

Adjust cost basis down

Question 23

Discounts accrete

Answer 23

Adjust cost basis up

Question 24

Tax equivalent yield

Answer 24

Municipal yield/(100%- investors tax bracket)

Question 25

Tax-free equivalent yield

Answer 25

Corporate yield * (100%- investors tax bracket)