System t

Question 1

SYSTEM-T

Answer 1

Security
Yield
Spread
Term
Expenses and External
Marketability
Tax

Question 2

Security

Answer 2

1. Issuer/borrower
2. Collateral: secured/unsecured.
3. Covenants.
4. Regulations: minima and maxima.

Question 3

Yield

Answer 3

1. Nature
2. Quotation.
3. Level
4. Relative level (to other asset classes)
5. Cash flow pattern

Question 4

Spread

Answer 4

1. Volatility.
2. Measurement.
3. Reliability
4. Appetite

Question 5

Term

Answer 5

1. Length
2. Variability
3. Terms and conditions
4. Cash flow pattern

Question 6

Expenses and External

Answer 6

1. Transaction costs
2. Exchange rates
3. External Influences

Question 7

Marketability

Answer 7

Marketability
Liquidity
Secondary markets

Question 8

Tax

Answer 8

Tax regime applicable

Effects of tax on investor behaviour.