International Finance And Treasury - Study Mode
[#561] Sum of purchase price and accrued interest on treasury bonds and notes is considered as
Correct Answer
(A) dirty price
Explanation
Solution: Sum of purchase price and accrued interest on treasury bonds and notes is considered as dirty price. A dirty price is a bond pricing quote, which refers to the cost of a bond that includes accrued interest based on the coupon rate.
[#562] Type of bonds that are swapped to less developed country against an outstanding loan are classified as
Correct Answer
(A) Brady bonds
Explanation
Solution: Type of bonds that are swapped to less developed country against an outstanding loan are classified as Brady bonds. Brady bonds are bonds that are issued by the governments of developing countries. Brady bonds are some of the most liquid emerging market securities.
[#563] According to best efforts offering, investment bank in return of providing services must
Correct Answer
(B) receive fee
Explanation
Solution: According to best efforts offering, investment bank in return of providing services must receive fee. An investment bank (IB) is a financial intermediary that performs a variety of services. Most Investment banks specialize in large and complex financial transactions, such as underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations and acting as a broker or financial adviser for institutional clients.
[#564] Requirement of certain amount of issued bond that must be retired every year is classified as
Correct Answer
(A) sinking fund provision
Explanation
Solution: Requirement of certain amount of issued bond that must be retired every year is classified as sinking fund provision. A provision in some bond indentures requiring the issuer to put money aside to repay bondholders at maturity. In bonds with such a provision, a fund or account is set up into which an issuer deposits money on a regular basis to repay the bond when it matures.
[#565] In capital markets, instruments which are traded having maturity of more than one year is classified as
Correct Answer
(B) bonds and mortgages
Explanation
Solution: In capital markets, instruments which are traded having maturity of more than one year is classified as bonds and mortgages. A mortgage bond is a bond secured by a mortgage or pool of mortgages. These bonds are typically backed by real estate holdings and real property such as equipment. In a default situation, mortgage bondholders have a claim to the underlying property and could sell it off to compensate for the default.