SIE – DEBT question and answers rated A+ already passed 2023

SIE – DEBT question and answers rated A+ already passed 2023All of the following are money market instruments EXCEPT - BAs - REPOs - CDs - ADRs - correct answer ADRs Which security is NOT subject to reinvestment risk - Zero coupon bonds - Low coupon bonds - Medium coupon bonds - High coupon bonds - correct answer Zero coupon bonds Treasury notes are issued by the US government in: I Bearer form II Book entry form III Minimum denominations of $100 IV Minimum denominations of $10,000 - correct answer II Book Entry form III Minimum denominations of $100 Short sales of of municipal bonds rarely occur BC - correct answer The trading market is thin, making short covering difficult A municipal note that is issued in anticipation of receiving future revenues - correct answer RAN The trust indenture of a bond would include which of the following information? - correct answer I. Interest rate II. Maturity III. Collateral backing the issue IV. Call provisions All of them 20 basis points equals - correct answer 1 basis point = .01% 10 basis points = .1% 20 basis points = .2% Which statements are TRUE regarding treasury STRIPS? I. Interest is paid semi-annually II. The bonds are issued at a discount III. Interest income is accreted and taxed annually IV. Interest earned is subject to reinvestment risk - correct answer II The bonds are issued at a discount III Interest income is accreted and taxed annually Which of the following projects would be financed by a revenue bond issue? I. The construction of a new subway line II. The construction of a new junior high school III. The construction of a new hydroelectric generating plant IV. The construction of a new sewage treatment plant - correct answer I, III and IV An increasing market rate of interest would lead to: - correct answer Lower bond prices