Bonds and Bond Markets Online Exam Quiz

Important questions about Bonds and Bond Markets. Bonds and Bond Markets MCQ questions with answers. Bonds and Bond Markets exam questions and answers for students and interviews.

The second mortgages pledged against bond's security are referred as


A : a. loan mortgages

B : b. medium mortgages

C : c. senior mortgages

D : d. junior mortgages

The long period of bond maturity leads to


A : a. more price change

B : b. stable prices

C : c. standing prices

D : d. mature prices

If the coupon rate is equal to going rate of interest then the bond will be sold


A : a. at par value

B : b. below its par value

C : c. more than its par value

D : d. seasoned par value

The falling interest rate leads change to bondholder income which is


A : a. reduction in income

B : b. increment in income

C : c. matured income

D : d. frequent income

The bonds issued by corporations and exposed to default risk are classified as


A : a. corporation bonds

B : b. default bonds

C : c. risk bonds

D : d. zero risk bonds

The treasury bonds are exposed to additional risks and include


A : a. reinvestment risk

B : b. interest rate risk

C : c. investment risk

D : d. both a and b

If the bond's call provision is practiced in first year of issuance then an additional payment is classified as


A : a. issuance provision

B : b. bond provision

C : c. call provision

D : d. first provision

The reinvestment risk of bonds is higher on


A : a. short maturity bonds

B : b. high maturity bonds

C : c. high premium bonds

D : d. high inflated bonds

The bonds that have high liquidity premium usually have


A : a. inflated trading

B : b. default free trading

C : c. less frequently traded

D : d. frequently traded

The bond which is offered below its face value is classified as


A : a. present value bond

B : b. original issue discount bond

C : c. coupon issued bond

D : d. discounted bond

The risk of fall in income due to fall in interest rates in future is classified as


A : a. income risk

B : b. investment risk

C : c. reinvestment risk

D : d. mature risk

The redemption option which protects investors against rise in interest rate is considered as


A : a. redeemable at deferred

B : b. redeemable at par

C : c. redeemable at refund

D : d. redeemable at finding

The payment divided by the par value is classified as


A : a. divisible payment

B : b. coupon payment

C : c. par payment

D : d. per period payment

An official entity that represents the bondholders and ensures the stated rules in indenture is classified as


A : a. trustee

B : b. trust

C : c. stated entity

D : d. owner entity

If the coupon rate is more than going rate of interest then the bond will be sold


A : a. more than its par value

B : b. seasoned par value

C : c. at par value

D : d. below its par value

The call provision practiced by the company which states that call price will be paid is classified as


A : a. super refund provision

B : b. super put redemption

C : c. make-whole call provision

D : d. super call provision

The difference between bond's yield and any other security yield having same maturities is considered as


A : a. maturity spread

B : b. bond spread

C : c. yield spread

D : d. interest spread

The protective covenant devised in the market to reduce event risk and to control debt cost is classified as


A : a. super poison covenant

B : b. super poison put

C : c. super poison call

D : d. super poison redemption

The coupon rate of convertible bond is


A : a. higher

B : b. lower

C : c. variable

D : d. stable

The rate denoted as r* is best classified as


A : a. real risk-free interest rate

B : b. real-risk free nominal rate

C : c. real-risk free quoted rate

D : d. real-risk free nominal premium

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