Unit 4 Debt Securities Flashcards

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1
Q

Premium callable bonds are quoted on a…

A

YTC basis

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2
Q

Discount callable bonds are quoted on a…

A

YTM basis

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3
Q

Exchange Trade Note (ETN)

A

return is tied to performance of an equity security
shares in the upside of equity, but if price declines they receive their principal back
EX: S&P down 5%, investor down 0%

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4
Q

ETN credit quality based on…

A

credit worthiness of issuer, not the underlying asset
seen as debt instruments

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5
Q

Current Yield =

A

Annual interest / bond market price

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6
Q

Auto-callable yield notes suitable for…

A

investors seeking higher interest rate than CYs of associated debt instruments

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