Question 1

The Wall Street Journal publishes daily values of yields to maturity for Japanese,German,British,and Canadian Government bonds.

Accepted Answer

A) Bond market participants can thereby compare the yield curve of the various countries. 
B) Bond market participants can thereby compare the term structure of interest rates of the various countries. 
C) Both a and b 
D) None of the above 
A) Bond market participants can thereby compare the yield curve of the various countries. 
B) Bond market participants can thereby compare the term structure of interest rates of the various countries. 
C) Both a and b 
D) None of the above

Question 2

A "bearer bond" is one that

Accepted Answer

A) shows the owner's name on the bond. 
B) the owner's name is recorded by the issuer. 
C) possession is evidence of ownership. 
D) both a and b 
A) shows the owner's name on the bond. 
B) the owner's name is recorded by the issuer. 
C) possession is evidence of ownership. 
D) both a and b

Question 3

In any given year,about what percent of new international bonds are likely to be Eurobonds rather than foreign bonds?

Accepted Answer

A) 80% 
B) 45% 
C) 25% 
D) 15% 
A) 80% 
B) 45% 
C) 25% 
D) 15%

Question 4

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 above 
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 above

Question 5

Zero coupon bonds

Accepted Answer

A) pay interest at zero percent. 
B) are sold at a discount from par value. 
C) are attractive to Japanese investors who are not required to pay taxes on capital gains. 
D) both a and b. 
A) pay interest at zero percent. 
B) are sold at a discount from par value. 
C) are attractive to Japanese investors who are not required to pay taxes on capital gains. 
D) both a and b.

Question 6

Find the yield to maturity for this floating rate note: The reset date is today; coupons are paid annually according to the formula (LIBOR + ¼ percent); since issuance,there has not been a change in the issuer's credit rating.The bond has ten years to maturity and LIBOR = 3.5 percent.

Accepted Answer

A) 3.5% 
B) 4% 
C) 3.75% 
D) There is not enough information provided to make a determination. 
A) 3.5% 
B) 4% 
C) 3.75% 
D) There is not enough information provided to make a determination.

Question 7

Find the present value of a 3-year bond that pays an annual coupon,has a coupon rate of 6%,a yield to maturity of 5%,a par value of €1,000 when the yield to maturity is 5%.

Accepted Answer

A) €1,018.81 
B) €1,027.23 
C) €1,099.96 
D) none of the above 
A) €1,018.81 
B) €1,027.23 
C) €1,099.96 
D) none of the above

Question 8

In any given year,about what percent of outstanding bonds are likely to be international rather than domestic bonds?

Accepted Answer

A) 70% 
B) 50% 
C) 30% 
D) 5% 
A) 70% 
B) 50% 
C) 30% 
D) 5%

Question 9

A "foreign bond" issue is

Accepted Answer

A) one denominated in a particular currency but sold to investors in national capital markets other than the country that issued the denominating currency. 
B) one offered by a foreign borrower to investors in a national market and denominated in that nation's currency. 
C) for example, a German MNC issuing dollar-denominated bonds to U.S.investors. 
D) both b and c 
A) one denominated in a particular currency but sold to investors in national capital markets other than the country that issued the denominating currency. 
B) one offered by a foreign borrower to investors in a national market and denominated in that nation's currency. 
C) for example, a German MNC issuing dollar-denominated bonds to U.S.investors. 
D) both b and c

Question 10

Suppose your firm needs to raise €100,000,000 with a one-year bond with a coupon rate of 8 percent per annum.The underwriting spread is 2 percent.What should the amount of the bond offering be?

Accepted Answer

A) €102,000,000 
B) €102,040,816.30 
C) €94,482,237 
D) €110,204,081.60 
A) €102,000,000 
B) €102,040,816.30 
C) €94,482,237 
D) €110,204,081.60

Question 11

Eurobonds are usually

Accepted Answer

A) registered bonds. 
B) bearer bonds. 
C) floating-rate, callable and convertible. 
D) denominated in the currency of the country that they are sold in. 
A) registered bonds. 
B) bearer bonds. 
C) floating-rate, callable and convertible. 
D) denominated in the currency of the country that they are sold in.

Question 12

"Bulldog" 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 above 
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 above

Question 13

Floating-rate notes

Accepted Answer

A) are a form of adjustable rate bond. 
B) have contractually specified coupon payments, therefore they are fixed rate bonds. 
C) always trade at par value. 
D) both a and c 
A) are a form of adjustable rate bond. 
B) have contractually specified coupon payments, therefore they are fixed rate bonds. 
C) always trade at par value. 
D) both a and c

Question 14

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

Question 15

The underwriting syndicate of a bond offering is

Accepted Answer

A) a group of investment banks, merchant banks, and the merchant banking arms of commercial banks that agree to buy the bond from the issuer and then resell it. 
B) a group of investment fund managers, brokers, and dealers who specialize in the secondary bond market. 
C) a group of investment banks, merchant banks, and the merchant banking arms of commercial banks that specialize in some phase of a public issuance. 
D) none of the above 
A) a group of investment banks, merchant banks, and the merchant banking arms of commercial banks that agree to buy the bond from the issuer and then resell it. 
B) a group of investment fund managers, brokers, and dealers who specialize in the secondary bond market. 
C) a group of investment banks, merchant banks, and the merchant banking arms of commercial banks that specialize in some phase of a public issuance. 
D) none of the above

Question 16

A global bond issue denominated in U.S.dollars and issued by U.S.corporations

Accepted Answer

A) trade as Eurobonds overseas. 
B) trade as domestic bonds in the U.S.domestic market. 
C) both a and b 
D) none of the above 
A) trade as Eurobonds overseas. 
B) trade as domestic bonds in the U.S.domestic market. 
C) both a and b 
D) none of the above

Question 17

Euro-medium term notes

Accepted Answer

A) are typically fixed-rate corporate notes issued with maturities ranging from less than a year to about ten years. 
B) are typically fixed-rate corporate notes issued with maturities ranging from three years to about ten years. 
C) are sold just like bonds in the primary market. 
D) none of the above 
A) are typically fixed-rate corporate notes issued with maturities ranging from less than a year to about ten years. 
B) are typically fixed-rate corporate notes issued with maturities ranging from three years to about ten years. 
C) are sold just like bonds in the primary market. 
D) none of the above

Question 18

Consider an 8.5 percent Swiss franc/U.S.dollar dual-currency bonds that pays $666.67 at maturity per SF1,000 of par value.If the bond sells at par,what is the implicit SF/$ exchange rate at maturity? Will the investor be better or worse off at maturity if the actual SF/$ exchange rate is SF1.35/$1.00?

Accepted Answer

A) SF1.5/$1.00; better off 
B) SF1.5/$1.00; worse off 
A) SF1.5/$1.00; better off 
B) SF1.5/$1.00; worse off

Question 19

Proportionately more domestic bonds than international bonds are denominated in the ____________ while more international bonds than domestic bonds are denominated in the _________________

Accepted Answer

A) Euro and the yen, the dollar and the pound sterling. 
B) Dollar and the pound sterling, the euro and the yen. 
C) Euro and the pound sterling, the dollar and the yen. 
D) Dollar and the yen, the euro and the pound sterling. 
A) Euro and the yen, the dollar and the pound sterling. 
B) Dollar and the pound sterling, the euro and the yen. 
C) Euro and the pound sterling, the dollar and the yen. 
D) Dollar and the yen, the euro and the pound sterling.

Question 20

U.S.security regulations require Yankee bonds and U.S.corporate bonds sold to U.S.citizens to be

Accepted Answer

A) municipal bonds. 
B) registered bonds. 
C) bearer bonds. 
D) none of the above 
A) municipal bonds. 
B) registered bonds. 
C) bearer bonds. 
D) none of the above

The Wall Street Journal publishes daily values of yields to maturity for Japanese,German,British,and Canadian Government bonds.

A "bearer bond" is one that

In any given year,about what percent of new international bonds are likely to be Eurobonds rather than foreign bonds?

Private placement bond issues

Zero coupon bonds

Find the yield to maturity for this floating rate note: The reset date is today; coupons are paid annually according to the formula (LIBOR + ¼ percent); since issuance,there has not been a change in the issuer's credit rating.The bond has ten years to maturity and LIBOR = 3.5 percent.

Find the present value of a 3-year bond that pays an annual coupon,has a coupon rate of 6%,a yield to maturity of 5%,a par value of €1,000 when the yield to maturity is 5%.

In any given year,about what percent of outstanding bonds are likely to be international rather than domestic bonds?

A "foreign bond" issue is

Suppose your firm needs to raise €100,000,000 with a one-year bond with a coupon rate of 8 percent per annum.The underwriting spread is 2 percent.What should the amount of the bond offering be?

Eurobonds are usually

"Bulldog" bonds are

Floating-rate notes

The vast majority of new international bond offerings

The underwriting syndicate of a bond offering is

A global bond issue denominated in U.S.dollars and issued by U.S.corporations

Euro-medium term notes

Proportionately more domestic bonds than international bonds are denominated in the while more international bonds than domestic bonds are denominated in the _____

U.S.security regulations require Yankee bonds and U.S.corporate bonds sold to U.S.citizens to be

Globalization and the Multinational Firm

International Monetary System

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

The Wall Street Journal publishes daily values of yields to maturity for Japanese,German,British,and Canadian Government bonds.

A "bearer bond" is one that

In any given year,about what percent of new international bonds are likely to be Eurobonds rather than foreign bonds?

Private placement bond issues

Zero coupon bonds

Find the yield to maturity for this floating rate note: The reset date is today; coupons are paid annually according to the formula (LIBOR + ¼ percent); since issuance,there has not been a change in the issuer's credit rating.The bond has ten years to maturity and LIBOR = 3.5 percent.

Find the present value of a 3-year bond that pays an annual coupon,has a coupon rate of 6%,a yield to maturity of 5%,a par value of €1,000 when the yield to maturity is 5%.

In any given year,about what percent of outstanding bonds are likely to be international rather than domestic bonds?

A "foreign bond" issue is

Suppose your firm needs to raise €100,000,000 with a one-year bond with a coupon rate of 8 percent per annum.The underwriting spread is 2 percent.What should the amount of the bond offering be?

Eurobonds are usually

"Bulldog" bonds are

Floating-rate notes

The vast majority of new international bond offerings

The underwriting syndicate of a bond offering is

A global bond issue denominated in U.S.dollars and issued by U.S.corporations

Euro-medium term notes

Proportionately more domestic bonds than international bonds are denominated in the ____________ while more international bonds than domestic bonds are denominated in the _________________

U.S.security regulations require Yankee bonds and U.S.corporate bonds sold to U.S.citizens to be

Globalization and the Multinational Firm

International Monetary System

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

Proportionately more domestic bonds than international bonds are denominated in the while more international bonds than domestic bonds are denominated in the _____