Examen 1. Etapa 1 Fixed Income

A 10-year bond was issued four years ago. It is denominated in US dollars, offers an 8% coupon with interest paid semiannually, and currently trades at 103% of par. Regarding this bond, it is most accurate to state that its:

An affirmative covenant is best described as a clause that:

Which of the following provisions benefits the issuer?

An investor buys at par a 5-year bond with a 5% annual coupon and a face value of $1,000, and is promised level payments of $210.18 in each of the first four years, plus a larger payment of $360.18 at maturity. This bond is most likely a:

The benefit to the issuer of a deferred-coupon bond is most likely related to:

The final payment of a partially amortized residential mortgage loan is most accurately called a:

A company wants to modify the design of its new debt to mitigate investors’ concern about credit risk. Which of the following measures would best achieve this?

An investment bank that underwrites a bond issue most likely:

A company that increases the size of an already existing bond issue at a price significantly different from par is carrying out a:

A liquid secondary bond market allows an investor to sell a bond at:

The bond issue that trades with the widest bid-offer spread is most likely a:

Compared with commercial paper, a repurchase agreement (repo) is most likely characterized by being:

Euroyen bonds are most likely:

Among the following fixed-income securities, the most liquid is most likely:

At the start of the year, a US investor bought at par a 5-year municipal bond with a face value of $20,000. During the year the investor received $900 of coupon from this bond. If ordinary income and short-term capital gains are taxed at 30% and 20% respectively, the investor’s tax liability on this bond for the year is approximately:

A fixed-coupon bond trades at a premium to par. This most likely implies that:

A bond with a face value of $1,000 pays a 6% annual coupon and matures in 3 years. If the market yield (YTM) is 8% per year, the bond’s price is approximately:

A bond pays a 5% annual coupon on a $1,000 face value. Its quoted flat (clean) price is $980 and 73 days have passed since the last coupon (360-day convention). The full (dirty) price the buyer pays is approximately:

The yield-to-maturity (YTM) of a coupon bond makes, among others, the assumption that:

The G-spread is most accurately defined as: