Question 1

Proportionately more domestic bonds than international bonds are dominated in

Accepted Answer

A) the dollar. 
B) the yen. 
C) the dollar and the yen. 
D) none of the options 
A) the dollar. 
B) the yen. 
C) the dollar and the yen. 
D) none of the options

Question 2

There are two types of equity related bonds:

Accepted Answer

A) convertible bonds and dual currency bonds. 
B) convertible bonds and kitchen sink bonds. 
C) convertible bonds and bonds with equity warrants. 
D) callable bonds and exchangeable bonds. 
A) convertible bonds and dual currency bonds. 
B) convertible bonds and kitchen sink bonds. 
C) convertible bonds and bonds with equity warrants. 
D) callable bonds and exchangeable bonds.

Question 3

The key driver of a sovereign's economic assessment is

Accepted Answer

A) income levels. 
B) growth prospects. 
C) economic diversity and volatility. 
D) all of the options 
A) income levels. 
B) growth prospects. 
C) economic diversity and volatility. 
D) all of the options

Question 4

With regard to clearing procedures for bond transactions,when a transaction is conducted,electronic book entries are made that transfer book ownership of the bond certificates from the seller to the buyer and transfer funds from the purchaser's cash account to the seller's.However,

Accepted Answer

A) physical transfer of the bonds seldom takes place. 
B) the physical transfer of the bonds takes place as much as 3 days later. 
C) the physical transfer of the bonds takes place as much as 6 weeks later. 
D) the physical transfer of bonds only occurs if the depository banks that physically store bond certificates are different for the buyer and seller. 
A) physical transfer of the bonds seldom takes place. 
B) the physical transfer of the bonds takes place as much as 3 days later. 
C) the physical transfer of the bonds takes place as much as 6 weeks later. 
D) the physical transfer of bonds only occurs if the depository banks that physically store bond certificates are different for the buyer and seller.

Question 5

Which of the following reflects the sustainability of a sovereign's deficits and debt burden?

Accepted Answer

A) Institutional assessment 
B) External assessment 
C) Fiscal assessment 
D) Monetary assessment 
A) Institutional assessment 
B) External assessment 
C) Fiscal assessment 
D) Monetary assessment

Question 6

A five-year floating-rate note has coupons referenced to six-month dollar LIBOR,and pays coupon interest semiannually.Assume that the current six-month LIBOR is 6 percent.If the risk premium above LIBOR that the issuer must pay is 1/8 percent,the next period's coupon rate on a $1,000 face value FRN will be

Accepted Answer

A) $29.375 
B) $30,000 
C) $30.625 
D) $61.250 
A) $29.375 
B) $30,000 
C) $30.625 
D) $61.250

Question 7

Underwriters for an international bond issue will commit their own capital to buy the issue from the borrower at a discount from the issue price.The discount,or underwriting spread,is typically

Accepted Answer

A) in the 1 to 1.5 percent range. 
B) in the 2 to 2.5 percent range. 
C) in the 3 to 3.5 percent range. 
D) in the 4 to 4.5 percent range. 
A) in the 1 to 1.5 percent range. 
B) in the 2 to 2.5 percent range. 
C) in the 3 to 3.5 percent range. 
D) in the 4 to 4.5 percent range.

Question 8

The secondary market for Eurobonds

Accepted Answer

A) is an over-the-counter market. 
B) is an organized exchange. 
C) has never developed-there is only a primary market for Eurobonds. 
D) none of the options 
A) is an over-the-counter market. 
B) is an organized exchange. 
C) has never developed-there is only a primary market for Eurobonds. 
D) none of the options

Question 9

The vast majority of new international bond offerings

Accepted Answer

A) make annual coupon payments. 
B) have fixed coupon payments. 
C) have a fixed maturity. 
D) all of the options 
A) make annual coupon payments. 
B) have fixed coupon payments. 
C) have a fixed maturity. 
D) all of the options

Question 10

"Investment grade" ratings are in these categories.

Accepted Answer

A) Moody's: AAA to BBB and S&P Global Ratings: Aaa to Baa 
B) Moody's: Aaa to Baa and S&P Global Ratings: AAA to BBB 
C) Moody's: AAA to A and S&P Global Ratings: Aaa to A 
D) Moody's: Aaa to A and S&P Global Ratings: AAA to A 
A) Moody's: AAA to BBB and S&P Global Ratings: Aaa to Baa 
B) Moody's: Aaa to Baa and S&P Global Ratings: AAA to BBB 
C) Moody's: AAA to A and S&P Global Ratings: Aaa to A 
D) Moody's: Aaa to A and S&P Global Ratings: AAA to A

Question 11

S&P Global Ratings has,for years,provided credit ratings on international bonds.

Accepted Answer

A) The ratings reflect the safety of principal for a U.S.investor. 
B) Their ratings reflect the creditworthiness of the borrower and not exchange rate uncertainty. 
C) Their ratings reflect creditworthiness of the lender and predict the exchange rate expected to prevail at maturity. 
D) The ratings are biased since 40 percent of Eurobond issues are rated AAA and 30 percent are AA. 
A) The ratings reflect the safety of principal for a U.S.investor. 
B) Their ratings reflect the creditworthiness of the borrower and not exchange rate uncertainty. 
C) Their ratings reflect creditworthiness of the lender and predict the exchange rate expected to prevail at maturity. 
D) The ratings are biased since 40 percent of Eurobond issues are rated AAA and 30 percent are AA.

Question 12

Find the present value of a 2-year Treasury bond that pays a semi-annual coupon,has a coupon rate of 6 percent,a yield to maturity of 5 percent,a par value of $1,000 when the yield to maturity is 5 percent.

Accepted Answer

A) $1,018.81 
B) $1,231.15 
C) $699.07 
D) none of the options 
A) $1,018.81 
B) $1,231.15 
C) $699.07 
D) none of the options

Question 13

A "global bond" issue

Accepted Answer

A) is a very large international bond offering by several borrowers pooled together. 
B) is a very large international bond offering by a single borrower that is simultaneously sold in several national bond markets. 
C) has higher yields for the purchasers. 
D) has a lower liquidity. 
A) is a very large international bond offering by several borrowers pooled together. 
B) is a very large international bond offering by a single borrower that is simultaneously sold in several national bond markets. 
C) has higher yields for the purchasers. 
D) has a lower liquidity.

Question 14

The Eurobond segment of the international bond market

Accepted Answer

A) is roughly four times the size of the foreign bond segment. 
B) has considerably less regulatory hurdles than the foreign bond segment. 
C) typically has a lower rate of interest that borrowers pay in comparison to Yankee bond financing. 
D) all of the options 
A) is roughly four times the size of the foreign bond segment. 
B) has considerably less regulatory hurdles than the foreign bond segment. 
C) typically has a lower rate of interest that borrowers pay in comparison to Yankee bond financing. 
D) all of the options

Question 15

Because ________ do not have to meet national security regulations,name recognition of the issuer is an extremely important factor in being able to source funds in the international capital market.

Accepted Answer

A) Eurobonds 
B) Foreign bonds 
C) Bearer bonds 
D) Registered bonds 
A) Eurobonds 
B) Foreign bonds 
C) Bearer bonds 
D) Registered bonds

Question 16

"Samurai" bonds are

Accepted Answer

A) dollar-denominated foreign bonds originally sold to U.S.investors. 
B) yen-denominated foreign bonds originally sold in Japan. 
C) pound sterling-denominated foreign bonds originally sold in the U.K. 
D) none of the options 
A) dollar-denominated foreign bonds originally sold to U.S.investors. 
B) yen-denominated foreign bonds originally sold in Japan. 
C) pound sterling-denominated foreign bonds originally sold in the U.K. 
D) none of the options

Question 17

Private placement bond issues

Accepted Answer

A) do not have to meet the strict information disclosure requirements of publicly traded issues. 
B) have auditing requirements that do not adhere to publicly traded issues. 
C) meet the strict information disclosure requirements of publicly traded issues,but have larger minimum denominations. 
D) none of the options 
A) do not have to meet the strict information disclosure requirements of publicly traded issues. 
B) have auditing requirements that do not adhere to publicly traded issues. 
C) meet the strict information disclosure requirements of publicly traded issues,but have larger minimum denominations. 
D) none of the options

Question 18

A potentially significant factor in slowing or preventing a deterioration of sovereign creditworthiness in times of stress is (are)

Accepted Answer

A) stringent monetary policy. 
B) flexible monetary policy. 
C) large credit lines. 
D) liquid assets. 
A) stringent monetary policy. 
B) flexible monetary policy. 
C) large credit lines. 
D) liquid assets.

Question 19

A convertible bond pays interest annually at a coupon rate of 5 percent on a par value of $1,000.The bond has 10 years maturity remaining and the discount rate on otherwise identical non-convertible debt is 6.5 percent.The bond is convertible into shares of common stock at a conversion price of $25 per share (i.e.the bond is exchangeable for 40 shares).Today's closing stock price was $20.What is the floor value of this bond?

Accepted Answer

A) $800.00 
B) $892.17 
C) $1,250 
D) none of the options 
A) $800.00 
B) $892.17 
C) $1,250 
D) none of the options

Question 20

Investors will generally accept a lower yield on ________ than on ________ of comparable terms,making them a less costly source of funds for the issuer to service.

Accepted Answer

A) bearer bonds; registered bonds 
B) registered bonds; bearer bonds 
C) Eurobonds; domestic bonds 
D) domestic bonds; Eurobonds 
A) bearer bonds; registered bonds 
B) registered bonds; bearer bonds 
C) Eurobonds; domestic bonds 
D) domestic bonds; Eurobonds

Proportionately more domestic bonds than international bonds are dominated in

There are two types of equity related bonds:

The key driver of a sovereign's economic assessment is

With regard to clearing procedures for bond transactions,when a transaction is conducted,electronic book entries are made that transfer book ownership of the bond certificates from the seller to the buyer and transfer funds from the purchaser's cash account to the seller's.However,

Which of the following reflects the sustainability of a sovereign's deficits and debt burden?

Underwriters for an international bond issue will commit their own capital to buy the issue from the borrower at a discount from the issue price.The discount,or underwriting spread,is typically

The secondary market for Eurobonds

The vast majority of new international bond offerings

"Investment grade" ratings are in these categories.

S&P Global Ratings has,for years,provided credit ratings on international bonds.

Find the present value of a 2-year Treasury bond that pays a semi-annual coupon,has a coupon rate of 6 percent,a yield to maturity of 5 percent,a par value of $1,000 when the yield to maturity is 5 percent.

A "global bond" issue

The Eurobond segment of the international bond market

Because ________ do not have to meet national security regulations,name recognition of the issuer is an extremely important factor in being able to source funds in the international capital market.

"Samurai" bonds are

Private placement bond issues

A potentially significant factor in slowing or preventing a deterioration of sovereign creditworthiness in times of stress is (are)

Investors will generally accept a lower yield on than on of comparable terms,making them a less costly source of funds for the issuer to service.

International Monetary System

Globalization and the Multinational Firm

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters

Exam 12: International Bond Market

Proportionately more domestic bonds than international bonds are dominated in

There are two types of equity related bonds:

The key driver of a sovereign's economic assessment is

With regard to clearing procedures for bond transactions,when a transaction is conducted,electronic book entries are made that transfer book ownership of the bond certificates from the seller to the buyer and transfer funds from the purchaser's cash account to the seller's.However,

Which of the following reflects the sustainability of a sovereign's deficits and debt burden?

Underwriters for an international bond issue will commit their own capital to buy the issue from the borrower at a discount from the issue price.The discount,or underwriting spread,is typically

The secondary market for Eurobonds

The vast majority of new international bond offerings

"Investment grade" ratings are in these categories.

S&P Global Ratings has,for years,provided credit ratings on international bonds.

Find the present value of a 2-year Treasury bond that pays a semi-annual coupon,has a coupon rate of 6 percent,a yield to maturity of 5 percent,a par value of $1,000 when the yield to maturity is 5 percent.

A "global bond" issue

The Eurobond segment of the international bond market

Because ________ do not have to meet national security regulations,name recognition of the issuer is an extremely important factor in being able to source funds in the international capital market.

"Samurai" bonds are

Private placement bond issues

A potentially significant factor in slowing or preventing a deterioration of sovereign creditworthiness in times of stress is (are)

Investors will generally accept a lower yield on ________ than on ________ of comparable terms,making them a less costly source of funds for the issuer to service.

International Monetary System

Globalization and the Multinational Firm

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters

Investors will generally accept a lower yield on than on of comparable terms,making them a less costly source of funds for the issuer to service.