INV3702 OCT/NOV 2022 EXAM
ELIANA BOTES
[COMPANY NAME] [Company address]
, An analyst has noticed lately that the price of a particular bond has risen less when the yield
falls by 0.1% than the price falls when rates increase by 0.1%. She could conclude that the
bond:
a.
will be downgraded by credit-rating agencies.
b.
has negative convexity.
c.
has an embedded put option.
d.
is an option-free bond.
The full price of a bond:
a.
includes accrued interest.
b.
cannot be calculated between coupon payment dates.
c.
includes trading costs.
d.
is also known as the “clean” price.
ELIANA BOTES
[COMPANY NAME] [Company address]
, An analyst has noticed lately that the price of a particular bond has risen less when the yield
falls by 0.1% than the price falls when rates increase by 0.1%. She could conclude that the
bond:
a.
will be downgraded by credit-rating agencies.
b.
has negative convexity.
c.
has an embedded put option.
d.
is an option-free bond.
The full price of a bond:
a.
includes accrued interest.
b.
cannot be calculated between coupon payment dates.
c.
includes trading costs.
d.
is also known as the “clean” price.
