3 - Equity & Fixed Income Flashcards Preview

Series 65 > 3 - Equity & Fixed Income > Flashcards

Flashcards in 3 - Equity & Fixed Income Deck (105)
Loading flashcards...
1

Frequency of interest payments to bondholders

Semi-annual

2

Equivalent of 100 basis points

1%

3

Relationship between bond prices and bond yields

Inverse

4

A bond that is priced below par

Discount

5

An unsecured corporate bond

Debenture

6

Most senior form of corporate bond

Secured

7

Security with the most junior claim in a corporate liquidation

Common stock

8

Agency debt that is backed in full by the U.S. government

Ginnie Mae

9

Considered the safest form of debt issued in the U.S.

U.S. Government bonds and notes

10

Taxable at the federal level; may be exempt from taxation at the state level

U.S. Government bonds and notes

11

Of YTC, YTM and CY, the yield that is highest when a bond is trading at a premium and is callable

Nominal Yield

12

Of YTM, YTC and CY, the yield that is highest when a bond is trading at a discount and is callable

Yield to call (YTC)

13

Of YTM, YTC and CY, the yield that is lowest when a bond is trading at a discount

Nominal Yield

14

Of YTM, YTC and CY, the yield that is lowest when a bond is trading at a premium and is callable

Yield to call (YTC)

15

Amount a bondholder receives at maturity of an ABC 9% bond

$1045 (par + 1 semiannual interest payment)

16

Amount of interest paid every 6 months on 5 XYZ 6% bonds

$150 ($30 semiannual interest per bond)

17

Securities that are not represented by a physical certificate

Book Entry securities

18

Interest payment varies based on performance of an index

Variable rate or adjustable rate bonds

19

Fixed rate equity security that responds to market conditions like a bond

Preferred stock

20

The date in the future at which a bondholder receives principal

Maturity

21

Of long-term and short-term bonds, which generally pays a higher interest amount?

Long-term bonds

22

Of long-term and short-term bonds, which generally has lower price volatility?

Short-term bonds

23

The degree of risk associated with an issuer's ability to repay the principal

Credit or default risk

24

A bond that is rated BBB- or above by Standard and Poor's

Investment Grade

25

A bond that may be redeemed by the issuer prior to its maturity date

Callable bond

26

Risk that a bond may be called prior to maturity

Call risk

27

The process of calling bonds when interest rates have fallen

Refunding

28

Issuer funds set aside in advance of a call

Sinking fund

29

Allows the issuer to call bonds before maturity if certain specified events occur

Catastrophe clause

30

Specific time period from date of issue when a bond cannot be called

Call Protection Period