Chapter 2 - Fixed Income Analysis Flashcards Preview

Investment Management > Chapter 2 - Fixed Income Analysis > Flashcards

Flashcards in Chapter 2 - Fixed Income Analysis Deck (4)
Loading flashcards...
1
Q

What are some special features of bonds

A
  1. Callable - can be purchased back at the option of the issuer
  2. Convertible - can be converted into equity for corporate bonds
  3. Zero coupon - no coupon but are issued at a discount to face value
2
Q

What are bonds

A
  1. The most common form of fixed instrument
  2. Debt instruments to raise mid to long-term funds for various issuers (country, municipal and corporate)
  3. Fixed tenure and a predefined coupon payable at defined intervals
3
Q

What are some features of the Eurobond

A
  1. They are issued in a currency other than the home currency if the issuer
  2. Flexibility for buyer to select currency of choice
4
Q

What are the features of asset backed securities

A

These are fixed income instruments that are structured based on the income generated by a pool of assets.

The securitization and subsequent sale of these assets creates liquidity for the issuer (to create more assets)

Creates opportunities for investors to have access to investments that they normally would not have been able to invest in

Performance of the instrument is based on the quality of the underlying asset