Question 1:

Which of the following bond will most likely to o er highest yield

a. Supra national bond

b. Quasi Government Bond

c. corporate bond

d. Soverign Bond

Question 2:

Which of the following bonds is most likely to exhibit the greatest volatility due to interest
rate changes? A bond with a:

a. high coupon and a long maturity

b. high coupon and a short maturity.

c. low coupon and a short maturity.

d. low coupon and a long maturity.

Question 3:

Downgrade will cause the bond to trade with_____ yield spread?

a. Wider

b. Narrower

c. Similar

d. Average

Question 4:

When Coupon rate increases bond duration_____

a. Increases

b.decreases

c. remain

d.samefluctuate

Question 5:

When computing the yield to maturity, the implicit reinvestment assumption is that the
interest payments are reinvested at the:

a. coupon rate.

b. yield to maturity at the time of the investment.

c. prevailing yield to maturity at the time interest payments are received.

d. market interest rate

Question 6:

The distinction between investment grade debt and non-investment grade debt is best
described by di erences in

a. Default Risk

b. Maturity date

c. Interest Rate Risk

d. Tax Status

Question 7:

The maturity of commercial paper is______?

a. Overnight

b. Overnight to 3 months

c. 3 months to 6 months

d. 3 months to 1 year

Question 8:

The issuer has the option to reddem the bond before maturity in which of the following type
of bonds?

a. Plain Vanilla Bond

b. Puttable Bond

c. Callable bond

d. All of the above

Question 9:

The Investment Bank takes the risk of selling the issue in which type of public o ering?

a. Best O er O ering

b. Underwritten o ering

c. Auctions

d. Private Placement

Question 10:

The LIBOR rate is 3% on 31st Jan and 3.5% on 31st March. For quarter endiong March 2018
what rate will be applicable for a Floating rate bond o ering LIBOR +1% coupon to
calculate the coupon amount

a. 3%

b. 4%
c. 3.5%

d. 4.5%

Question 11:

The maturity of money market securities is less than

a. 10 years

b. 5 years

c. 2 years

d. one year

Question 12:

When interest rates increase, the modified duration of a 30-year bond selling at a discount:

a. Increases

b. decreases

c. remain same

d. fluctuate

Question 13:

An excess spread account incorporated into a securitized structure is designed to limit:

a. Extension

b. contration

c. balloon

d. credit risk

Question 14:

When maturity of bond decreases duration______?

a. Increases

b. decreases

c. remain same

d. fluctuate

Question 15:

Which of the following bond has a fixed coupon rate

a. Deep Discount Bond

b. Plain Vanilla Bond

c. Floating Rate Note

d. Zero Coupon Bond

Question 16:

Which of the following sources of return is most likely exposed to interest rate risk for an
investor of a fixed-rate bond who holds the bond until maturity?

a. Capital Gain

b. Maturity Value

c. Coupon Payment

d. Reinvestment of Coupon Payment

Question 17:

The Cash flows of the mortgage include_____

a. Interest

b. Interest & principal

c. Interest, principal & pre-payment

d. Interest, principal, pre-payment & capital gain

Question 18:

The higher maturity bonds are_____ impacted for a given change in market discount rate in
comparison to short maturity bonds

a. More

b. Less

c. not impacted

d. None of the above

Question 19:

The ratio of Property purchase price to the amount of mortgage is called_____?

a. loan to value ratio

b. value to loan ratio

c. margin

d. none of the above

Question 20:

The price of a higher coupon bond will be_____ impacted in comparisen to lower coupon
bond for a given change in discount rate

a. More

b. Less
c. not impacted

d. None of the above

Question 21:

Recovery rates are greatest for classes of debt with the highest

a. priority of claims.

b. Coupon rates

c. loss severity.

d. default rates

Question 22:

Which of the following bonds has the highest interest rate sensitivity?

a. ten year option-free 6% coupon bond.

b. ten year option-free 4% coupon bond.

c. five year 5% coupon bond callable in one year.

d. five year 3% coupon bond callable in one year.

Question 23:

When the investor’s investment horizon is less than the Macaulay duration of the bond she
owns:

a. the investor is hedged against interest rate risk.

b. reinvestment risk dominates, and the investor is at risk of lower rates.

c. market price risk dominates, and the investor is at risk of higher rates.

d. credit risk dominates

Question 24:

The loan arranged by a group of banks to a company is known as___

a. Syndicated Loan

b. REPO

c. Reverse-Repo

d. Bylateral Loan

Question 25:

Bonds with more credit risk o er____ returns with_____ volatility than bonds with lower
credit risk?

a. Higher, Lower

b. Lower, Higher
c. Higher, Higher

d. Lower, Lower

Question 26:

The principal is reapid at maturity in single installment is an example of___

a. Sinking Fund

b. Bullet Structure

c. Amortizing bond

d. Partially amortizing bond

Question 27:

Analysis of a firm’s intellectual capital, equity market capitalization, depreciation, and

intangible assets is associated with which aspect of credit analysis?

a. Capacity

b. Covenants.

c. Collateral.

d. Coupon

Question 28:

A mortgage loan is a loan secured by collateral of specified____?

a. Automobile

b. Credit Card payments

c. Equipments

d. Real Estate

Question 29:

The condition imposed on the company as per bond indenture on ‘Restriction on

Investment’ can be categorized as____ Covenant

a. A irmative

b. Neutral

c. Negative

d. None of the above

Question 30:

In securitization who is the issuer of securities?

a. SPV

b. Underwriter
c. Depositor

d. Insurer