Quick and Easy Guides

Advanced Wealth Management Course (IIBF) - Paper 3
Part II: Ch 1: Debt Instruments - Basic Concepts
Q1.
The bonds, wherein payments are paid in installments, during the life of the bond is called :
Q2.
Bonds that allow the issuer to alter the tenor of a bond, by redeeming it prior to the original maturity date are called:
Q3.
(I) In European option, where the issuer specifies the date on which the option could be exercised. (II) In American option, providing issuer the right to call the bond on or any time before a pre-specified date.
Q4.
Bonds that provide an investor with the right to seek redemption from the issuer, prior to the maturity date, are called:
Q5.
An amount of Rs. 100 borrowed @18% would result in an annual interest cost of __________ , if interest is compounded on quarterly basis.
Q6.
(I) Fixed coupon bearing securities are known as “plain vanilla” securities. (II) Convertible bonds are called “deep discount” bonds.
Q7.
The main objective behind SARFAESI Act is to strengthen creditor tights through foreclosure and enforcement of securities by banks and financial institutions.
Q8.
A bond’s real yield is its:
Q9.
You could purchase a Rs. 1,000 par value bond that pays 5% coupon (Rs. 50) annually, for Rs. 800. So what would be the current yield based on your Rs. 800 investments?
Q10.
(I) Taxable bonds are issued at coupons higher than tax-free bonds. (II) Yield to maturity is the overall return on the bond if it is held to maturity.

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