Fixed Income Quiz

Q1. A plain vanilla bond is a type of fixed-income security.

Q2). A 10-year sovereign bond with a face value of $1000 has a semi-annual coupon payment of 6%. Now answer the following questions keeping this information in mind the bond held until maturity. Ignore the bond’s price.

• How many coupon payment terms are there for the bond?

Q3). A 10-year sovereign bond with a face value of $1000 has a semi-annual coupon payment of 6%. Now answer the following questions keeping this information keeping in mind the bond is held until maturity. This means when the bond is traded ignore the price of the bond.

•  The coupon payment is paid on the face value of the bond.

Q4). A 10-year sovereign bond with a face value of $1000 has a semi-annual coupon payment of 6%. Now answer the following questions keeping this information keeping in mind the bond is held until maturity. This means when the bond is traded ignore the price of the bond.

• Calculated coupon payment for each term.

Q5). A 10-year sovereign bond with a face value of $1000 has a semi-annual coupon payment of 6%. Now answer the following questions keeping this information keeping in mind the bond is held until maturity. This means when the bond is traded ignore the price of the bond.

• During the time of redemption, what will be the final payment i.e. Principal + Coupon Payment 

Q6). A 10-year sovereign bond with a face value of $1000 has a semi-annual coupon payment of 6%. Now answer the following questions keeping this information keeping in mind the bond is held until maturity. This means when the bond is traded ignore the price of the bond.

• Now consider the same bond, the trading price of the bond is $1033. What is the annual market yield of the bond?

Q7). Which of the following is an example of a Supranational entity?

Q8). BBB is a type of a _________ bond.

Q9). Among corporate bonds, which type of credit rating dominated investment grade. Refer to the module for this question.  

Q10). XYZ Corp. is facing bankruptcy. Based on your understanding of the module write from the top to down in terms of pecking order, claims of the bondholders based on the type of bonds.

Senior Secured Bonds, Subordinate Debt/ Debentures, Senior Subordinated Debt.

Q11). A company raised Euro 4 billion through bonds of maturity 7 years. Every year, the company reserves some amount of its profits towards the outstanding loan. Consider that the stated loan is the only outstanding loan at present for the company. This is an example of __________

Q12). ____________  type of securities have a periodic repayment schedule ?

Q13). Based on the educational video, who is credited with ENABLING/FACILTATING junk bond in the US ?  

Q14). Consider a  10-year sovereign bond. Calculate the default loss rate of a corporate bond that will recover 300 rupiahs for the bondholders. The Indonesian bond has a face value of 1000 rupiah. Consider the default rate of similar bonds with similar credit ratings to be 50%—answer in percent.

Q15). Calculate 300 bps point in percentage.  

Q16). Which type of bonds are backed by Green Bond Principles?