Unit 4 Debt Securities Flashcards
1
Q
Premium callable bonds are quoted on a…
A
YTC basis
2
Q
Discount callable bonds are quoted on a…
A
YTM basis
3
Q
Exchange Trade Note (ETN)
A
return is tied to performance of an equity security
shares in the upside of equity, but if price declines they receive their principal back
EX: S&P down 5%, investor down 0%
4
Q
ETN credit quality based on…
A
credit worthiness of issuer, not the underlying asset
seen as debt instruments
5
Q
Current Yield =
A
Annual interest / bond market price
6
Q
Auto-callable yield notes suitable for…
A
investors seeking higher interest rate than CYs of associated debt instruments
