International Finance And Treasury - Study Mode

[#581] Source of funds for repayment of municipal bonds is considered as
Correct Answer

(A) local tax and revenue

Explanation

Solution: Source of funds for repayment of municipal bonds is considered as local tax and revenue. Municipal bonds (or “munis” for short) are debt securities issued by states, cities, counties and other governmental entities to fund day-to-day obligations and to finance capital projects such as building schools, highways or sewer systems.

[#582] Bond holder can make profit by returning bonds and exchanging with other securities if market value with conversion value
Correct Answer

(D) exceeds market value of bond

Explanation

Solution: Bond holder can make profit by returning bonds and exchanging with other securities if market value with conversion value exceeds market value of bond. In exchange, the company pays an interest “coupon” (the annual interest rate paid on a bond, expressed as a percentage of face value) at predetermined intervals (usually annually or semiannually) and returns the principal on the maturity date, ending the loan.

[#583] Eurobonds are placed for buying and selling in primary markets by
Correct Answer

(A) investment banks

Explanation

Solution: Eurobonds are placed for buying and selling in primary markets by investment banks. 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.

[#584] Treasury bonds and notes pays interest rate is classified as
Correct Answer

(C) coupon interest semi-annually

Explanation

Solution: Treasury bonds and notes pays interest rate is classified as coupon interest semi-annually.

[#585] Securities with lower default risk and having highest credit quality are assigned rating of
Correct Answer

(C) triple A

Explanation

Solution: Securities with lower default risk and having highest credit quality are assigned rating of triple A. AAA is the highest possible rating that may be assigned to an issuer's bonds by any of the major credit rating agencies. AAA-rated bonds boast a high degree of creditworthiness, because their issuers are generally easily able meet their financial commitments and they consequently run lower risks of defaulting.