Fixed Income Flashcards

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1
Q

What is the credit spread risk?

A

The risk that the default risk premium on a bond can increase.

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2
Q

What is a callable bond?

A

It is a bond that the issuer may redeem before it matures.

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3
Q

What is a puttable bond?

A

It is a bond instrument that allows the bondholder to force the issuer to repurchase the security at specified dates before maturity.

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4
Q

What is the portfolio duration

A

It is an approximation of the price sensitivity of a portfolio to parallel shifts of the yield curve.

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5
Q

What is the interpolated spreads?

A

Spreads to swaps.

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6
Q

What are covered bonds?

A

An obligation of the corporation that issues them, but their interest and principal payments are provided by a pool of assets that are legally recognized as bankruptcy remote.

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7
Q

What are securitized bonds?

A

Those are the bonds issued by a special purpose entity to which the underlying assets are sold.

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