Fixed-Income Securities: Defining Elements Part 3

Question 1

Domestic Bond

Answer 1

Bonds that are issued and traded in a country and are denominated in the currency of that country

Question 2

Foreign bonds

Answer 2

Bonds that are issued by a foreign company but traded in the domestic market

Question 3

Euro bonds

Answer 3

Issued internationally, outside the jurisdiction of any single country, and are denoted in the currency other than that of the countries in which they trade

Question 4

Bearer bonds

Answer 4

Trustee does not maintain a record of who owns the bonds
recorded in the clearing system

Question 5

Registered bonds

Answer 5

Record of who owns the bond are maintained using a name or serial number

Question 6

Global bonds

Answer 6

Issued simultaneously in multiple markets

Question 7

Sources of return from a bond

Answer 7

Income from coupon payments
capital gain

Question 8

Tax on income portion of a bond investment

Answer 8

Taxed at the ordinary income tax rate

Question 9

Tax on capital gain

Answer 9

Uses pro-rata basis