Fixed Income Review Test and Quizzes (Answered) Verified Solution

The US debt market is larger than the US equity market? (T/F) TRUE All of the following are differentiating factors of fixed income securities versus equity securities except for: -Fixed claim -Infinite Life -Tax deductibility by user -Higher priority on cash flows Infinite Life A bond's CUSIP is defined as: A) A unique nine digit number to identify individual bonds B) A number assigned by the SEC to all registered bond offerings Only A is correct All of the following are differences in how bond trade versus equities except: -Equities generally trade at a wider spread differential -Bonds trade in a more opaque market (less pricing data readily available) -Equities tend to more often be traded on electronic exchanges -Minimum trading sizes for equities are smaller Equities generally trade at a wider spread differential In terms of returns, bond investors who buy and intend to hold a bond to maturity are primarily focused: A)Price appreciation