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Student name:__________
1) Domestic bonds account for the largest share of outstanding bonds, equaling
approximately what percent of the total?
A) 78 percent
B) 45 percent
C) 25 percent
D) 15 percent
2) A “foreign bond” issue is
A) one denominated in a particular currency but sold to investors in national capital
markets other than the country that issued the denominating currency.
B) one offered by a foreign borrower to investors in a national market and denominated
in another nation’s currency.
C) for example, a German MNC issuing euro-denominated bonds to U.S. investors.
D) one offered by a foreign borrower to investors in a national market and denominated
in that nation’s currency (e.g., a German MNC issuing dollar-denominated bonds to U.S.
investors).
3) The four currencies in which the majority of domestic and international bonds are
denominated are
A) U.S. dollar, the euro, the Indian rupee, and the Chinese yuan.
B) U.S. dollar, the euro, the pound sterling, and the Swiss franc.
C) U.S. dollar, the euro, the Swiss franc, and the yen.
D) U.S. dollar, the euro, the pound sterling, and the yen.
4) A “Eurobond” issue is
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A) denominated in a particular currency but sold to investors in national capital markets
other than the country that issued the denominating currency.
B) usually a bearer bond.
C) for example, a Dutch borrower issuing dollar-denominated bonds to investors in the
U.K., Switzerland, and the Netherlands.
D) all of the options
5) In any given year, 80 percent of new international bonds are likely to be
A) Eurobonds.
B) foreign currency bonds.
C) domestic bonds.
D) none of the options
6) “Yankee” bonds are
A) dollar-denominated foreign bonds originally sold to U.S. investors.
B) yen-denominated foreign bonds originally sold in Japan.
C) pound sterling-denominated foreign bonds originally sold in the U.K.
D) none of the options
7) “Samurai” bonds are
A) dollar-denominated foreign bonds originally sold to U.S. investors.
B) yen-denominated foreign bonds originally sold in Japan.
C) pound sterling-denominated foreign bonds originally sold in the U.K.
D) none of the options
8) “Dragon” bonds are
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A) dollar-denominated foreign bonds originally sold to U.S. investors.
B) dollar-denominated bonds originally sold in Asia with non-Japanese issuers.
C) pound sterling-denominated foreign bonds originally sold in the U.K.
D) none of the options
9) “Bulldog” bonds are
A) dollar-denominated foreign bonds originally sold to U.S. investors.
B) yen-denominated foreign bonds originally sold in Japan.
C) pound sterling-denominated foreign bonds originally sold in the U.K.
D) none of the options
10) A “bearer bond” is one that
A) shows the owner’s name on the bond.
B) the owner’s name is recorded by the issuer.
C) possession is evidence of ownership.
D) shows the owner’s name on the bond, and the owner’s name is recorded by the issuer.
11) A “registered bond” is one that
A) shows the owner’s name on the bond.
B) the owner’s name is recorded by the issuer.
C) the owner’s name is assigned to a bond serial number recorded by the issuer.
D) all of the options
12) U.S. security regulations require Yankee bonds and U.S. corporate bonds sold to U.S.
citizens to be
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A) municipal bonds.
B) registered bonds.
C) bearer bonds.
D) none of the options
13) Eurobonds are usually
A) bearer bonds.
B) registered bonds.
C) bulldog bonds.
D) foreign currency bonds.
14) Investors will generally accept a lower yield on __________ than on __________ of
comparable terms, making them a less costly source of funds for the issuer to service.
A) bearer bonds; registered bonds
B) registered bonds; bearer bonds
C) Eurobonds; domestic bonds
D) domestic bonds; Eurobonds
15) With a bearer bond,
A) possession is evidence of ownership.
B) the issuer keeps records indicating only who the current owner of a bond is.
C) the owner’s name is on the bond.
D) the owner’s name is assigned to the bond serial number, but not indicated on the
bond.
16) Publicly traded Yankee bonds must
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A) meet the same regulations as U.S. domestic bonds.
B) meet the same regulations as Eurobonds if sold to Europeans.
C) meet the same regulations as Samurai bonds if sold to Japanese.
D) none of the options
17) Securities sold in the United States to public investors must be registered with the SEC,
and a prospectus disclosing detailed financial information about the issuer must be provided and
made available to prospective investors. This encourages foreign borrowers wishing to raise U.S.
dollars to use
A) the Eurobond market.
B) their domestic market.
C) bearer bonds.
D) none of the options
18) Because __________ do not have to meet national security regulations, name recognition
of the issuer is an extremely important factor in being able to source funds in the international
capital market.
A) Eurobonds
B) Foreign bonds
C) Bearer bonds
D) Registered bonds
19) The shorter length of time in bringing a Eurodollar bond issue to market, coupled with
the lower rate of interest that borrowers pay for Eurodollar bond financing in comparison to
Yankee bond financing, are two major reasons why the Eurobond segment of the international
bond market is roughly __________ the size of the foreign bond segment.
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A) four times
B) two times
C) ten times
D) one hundred times
20) The Eurobond segment of the international bond market
A) is roughly four times the size of the foreign bond segment.
B) has considerably less regulatory hurdles than the foreign bond segment.
C) typically has a lower rate of interest that borrowers pay in comparison to Yankee
bond financing.
D) all of the options
21) U.S. corporations
A) are allowed to issue bearer bonds to non-U.S. citizens.
B) are not allowed to issue bearer bonds.
C) are allowed to issue treasury bonds but not T-bills.
D) none of the options
22) Shelf registration
A) accounts for outstanding shares repurchased and “shelved” by the company.
B) allows an issuer to preregister a securities issue, and then “shelve” the securities for
later sale.
C) allows an investment bank to increase the fees they charge by charging for storage of
the “shelved” securities.
D) eliminates the information disclosure that many foreign firms found objectionable in
the foreign bond market.
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23) Which of the following statements regarding shelf registration is not true?
A) has eliminated the time delay in bringing a foreign bond issue to market in the
United States.
B) allows an issuer to preregister a securities issue, and then “shelve” the securities for
later sale.
C) has not eliminated the information disclosure that many foreign borrowers find too
expensive.
D) eliminates the information disclosure that many foreign firms found objectionable in
the foreign bond market.
24) Private placement bond issues
A) do not have to meet the strict information disclosure requirements of publicly traded
issues.
B) have auditing requirements that do not adhere to publicly traded issues.
C) meet the strict information disclosure requirements of publicly traded issues, but
have larger minimum denominations.
D) none of the options
25) In 1990, the SEC instituted Rule 144A which
A) allows qualified institutional buyers in the U.S. to trade in private placement issues
that do not have to meet the strict information disclosure requirements of publicly traded issues.
B) was designed to make the U.S. capital markets more competitive with the Eurobond
market.
C) issues are non-registered and make only trade among qualified institutional buyers.
D) all of the above.
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26) Global bond issues were first offered in
A) 1889.
B) 1989.
C) 1999.
D) 2007.
27) Purchasers of global bonds are
A) mainly institutional investors to date.
B) desirous of the increased liquidity of the issues.
C) have been willing to accept lower yields.
D) all of the options
28) A “global bond” issue
A) is a very large international bond offering by several borrowers pooled together.
B) is a very large international bond offering by a single borrower that is simultaneously
sold in several national bond markets.
C) has higher yields for the purchasers.
D) has a lower liquidity.
29) A global bond issue denominated in U.S. dollars and issued by U.S. corporations
A) trade as Eurobonds overseas.
B) trade as domestic bonds in the U.S. domestic market.
C) trade as Eurobonds overseas and trade as domestic bonds in the U.S. domestic
market.
D) none of the options
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30) Global bond issues
A) tend to be larger bond issues with worldwide marketability
B) tend to have increased liquidity relative to Eurobonds or domestic bonds.
C) have been partially facilitated by rule 144A.
D) all of the options
31) In terms of the types of instruments offered,
A) the Yankee bond market has been more innovative than the international bond
market.
B) the international bond market has been much more innovative than the U.S. market.
C) the most innovations have come from Milan.
D) none of the options
32) Find the present value of a 2-year Treasury bond that pays a semi-annual coupon, has a
coupon rate of 6 percent, a yield to maturity of 5 percent, and a par value of $1,000.
A) $1,018.81
B) $1,231.15
C) $699.07
D) none of the options
33) Find the present value of a 3-year bond that pays an annual coupon, has a coupon rate of
6 percent, a yield to maturity of 5 percent, and a par value of €1,000.
A) €1,018.81
B) €1,027.23
C) €1,099.96
D) none of the options
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34) Find the present value of a 30-year bond that pays an annual coupon, has a coupon rate of
6 percent, a yield to maturity of 5 percent, and a par value of €1,000.
A) €1,018.81
B) €1,027.23
C) €1,153.72
D) none of the options
35) The vast majority of new international bond offerings
A) are straight fixed-rate notes.
B) are callable and convertible.
C) are convertible adjustable rate.
D) are adjustable rate, with interest rate caps and collars.
36) The vast majority of new international bond offerings
A) make annual coupon payments.
B) have fixed coupon payments.
C) have a fixed maturity.
D) all of the options
37) In contrast to many domestic bonds, which make __________ coupon payments, coupon
interest on Eurobonds is typically paid __________.
A) semiannual; annually
B) annual; semiannually
C) quarterly; semiannually
D) quarterly; annually
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38) Straight fixed-rate bond issues have
A) a designated maturity date at which the principal of the bond issue is promised to be
repaid. During the life of the bond, fixed coupon payments, which are a percentage of the face
value, are paid as interest to the bondholders.
B) a designated maturity date at which the principal of the bond issue is promised to be
repaid. During the life of the bond, coupon payments, which are indexed to some reference rate
like LIBOR, are paid as interest to bondholders.
C) a fixed payment, which amortizes the debt, like a house payment or car payment.
D) none of the options
39) The coupon interest on Eurobonds
A) is paid annually.
B) is paid in cash.
C) is paid in arrears.
D) all of the options
40) Eurobonds are usually
A) registered bonds.
B) bearer bonds.
C) floating-rate, callable and convertible.
D) denominated in the currency of the country that they are sold in.
41) Unlike a bond issue, in which the entire issue is brought to market at once, __________ is
partially sold on a continuous basis through an issuance facility that allows the borrower to
obtain funds only as needed on a flexible basis.
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A) a Euro-medium term note issue
B) bearer bond
C) a Euro-long term note issue
D) a Euro-short term note issue
42) Euro-medium term notes
A) are typically fixed-rate corporate notes issued with maturities ranging from less than
a year to about ten years.
B) are typically fixed-rate corporate notes issued with maturities ranging from three
years to about ten years.
C) are sold just like bonds in the primary market.
D) none of the options
43) Six-month U.S. dollar LIBOR is currently 4.25 percent; your firm issued floating-rate
notes indexed to six-month U.S. dollar LIBOR plus 50 basis points. What is the amount of the
next semi-annual coupon payment per U.S. $1,000 of face value?
A) $43.75
B) $47.50
C) $23.75
D) $46.875
44) Floating-rate notes (FRN)
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A) experience very volatile price changes between reset dates.
B) are typically medium-term bonds with coupon payments indexed to inflation only.
C) appeal to investors with strong need to preserve the principal value of the
investment;they have an appetite for interest rate risk.
D) are typically medium-term bonds with coupon payments indexed to some reference
rate (e.g., LIBOR), and appeal to investors with strong need to preserve the principal value of the
investment should they need to liquidate prior to the maturity of the bonds.
45) The first floating-rate notes (FRN) were introduced in
A) 1970
B) 1980
C) 1985
D) 1975
46) On a reset date, floating-rate notes
A) experience very volatile price changes.
B) market price will always gravitate toward par.
C) market price will usually gravitate toward par, unless the borrowers’ credit rating has
declined.
D) none of the options
47) Floating-rate notes
A) are a form of adjustable rate bond.
B) have contractually specified coupon payments; therefore they are fixed-rate bonds.
C) always trade at par value.
D) are a form of adjustable rate bond and always trade at par value.
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48) A five-year floating-rate note has coupons referenced to six-month dollar LIBOR, and
pays coupon interest semiannually. Assume that the current six-month LIBOR is 6 percent. If the
risk premium above LIBOR that the issuer must pay is 1/8 percent, the next period’s coupon rate
on a $1,000 face value FRN will be
A) $29.375
B) $30,000
C) $30.625
D) $61.250
49) Floating rate notes behave differently in response to interest rate risk than straight fixed-
rate bonds.
A) True since FRNs experience only mild price changes between reset dates, over which
time the next period’s coupon payment is fixed (assuming, of course, that the reference rate
corresponds to the market rate applicable to the issuer).
B) False since all bonds experience an inverse price change of equal amount when the
market rate of interest changes.
C) all of the options
D) none of the options
50) A ten-year floating-rate note (FRN) has coupons referenced to 3-month pound LIBOR,
and pays coupon interest quarterly. Assume that the current 3-month LIBOR is 4 percent. If the
risk premium above LIBOR that the issuer must pay is 1/8 percent, the next period’s coupon
payment on a £1,000 face value FRN will be
A) £31.25.
B) £82.50.
C) £165.00.
D) £10.31.
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51) The floor value of a convertible bond
A) is the “straight bond” value.
B) is the conversion value.
C) is the minimum of the “straight bond” value and the conversion value.
D) is the maximum of the “straight bond” value and the conversion value.
52) There are two types of equity related bonds:
A) convertible bonds and dual currency bonds.
B) convertible bonds and kitchen sink bonds.
C) convertible bonds and bonds with equity warrants.
D) callable bonds and exchangeable bonds.
53) Bonds with equity warrants
A) are really the same as convertible bonds if the stated price of exercising the warrant
is the par value of the bond.
B) can be viewed as straight debt with a call option (technically a warrant) attached.
C) can only be exercised on coupon dates.
D) typically are convertible as well.
54) A convertible bond pays interest annually at a coupon rate of 5 percent on a par value of
$1,000. The bond has 10 years maturity remaining and the discount rate on otherwise identical
non-convertible debt is 6.5 percent. The bond is convertible into shares of common stock at a
conversion price of $25 per share (i.e. the bond is exchangeable for 40 shares). Today’s closing
stock price was $20. What is the floor value of this bond?
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A) $800.00
B) $892.17
C) $1,250
D) none of the options
55) A convertible bond pays interest annually at a coupon rate of 5 percent on a par value of
$1,000. The bond has 10 years maturity remaining and the discount rate on other-wise identical
non-convertible debt is 5 percent. The bond is convertible into shares of common stock at a
conversion price of $25 per share (i.e., the bond is exchangeable for 40 shares). Today’s closing
stock price was $31.25. What is the floor value of this bond?
A) $800.00
B) $1,000
C) $1,250
D) none of the options
56) Consider a bond with an equity warrant. The warrant entitles the bondholder to buy 25
shares of the issuer at €50 per share for the lifetime of the bond. The bond is a 30-year zero
coupon bond with a €1,000 par value that has a yield to maturity of i€ = 5 percent. The price of
the bond is €500. What is the value of the warrant?
A) €231.38
B) €268.62
C) €500
D) none of the options
57) A __________-__________ bond is a straight fixed-rate bond issued in one currency that
pays coupon interest in that same currency, then at maturity, the principal is repaid in another
currency.
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A) dual-currency
B) bonds with equity warrants
C) warrant-convertible
D) exchange-convertible
58) Find the price of a 30-year zero coupon bond with a €1,000 par value that has a yield to
maturity of i€ = 5 percent.
A) €231.38
B) €432.20
C) €4,321.94
D) none of the options
59) Zero-coupon bonds issued in 2016 are due in 2026. If they were originally sold at 55
percent of face value, the implied yield to maturity at issuance is
A) 1.062 percent.
B) 6.16 percent.
C) 8.31 percent.
D) cannot be determined, need more information.
60) Zero coupon bonds
A) pay interest at zero percent.
B) are sold at a discount from par value.
C) are attractive to Japanese investors who are not required to pay taxes on capital gains.
D) pay interest at zero percent and are sold at a discount from par value.
61) Zero coupon bonds
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A) have no interest income.
B) are sold at a premium to par value.
C) give only capital gains income.
D) have no interest income and give only capital gains income.
62) When the bond sells at par, the implicit €/$ exchange rate at maturity of a Euro/U.S.
dollar dual currency bond that pays $651.25 at maturity per €1,000, is
A) €1.54/$1.00.
B) €1.22/$1.00.
C) €1.79/$1.00.
D) €1/$1.00.
63) When the bond sells at par, the implicit SF/$ exchange rate at maturity of a Swiss
franc/U.S. dollar dual currency bond that pays $581.40 at maturity per SF1,000, is
A) SF0.58/$1.00.
B) SF1.58/$1.00.
C) SF1.72/$1.00.
D) SF1.95/$1.00.
64) Consider a British pound—U.S. dollar dual currency bonds that pay £581.40 at maturity
per $1,000 of par value. If at maturity, the exchange rate is $1.80 = £1.00,
A) you should insist on getting paid in dollars.
B) it is an advantageous situation for investors holding this bond.
C) it is a disadvantageous situation for the issuer of the bond.
D) investors holding this bond are better off for the exchange rate and the issuer of the
bond is worse off for the exchange rate.
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65) Assuming that the bond sells at par, the implicit $/€ exchange rate at maturity of a Euro—
U.S. dollar dual currency bond that pays €651.25 at maturity per $1,000 of par value is
A) $1.72/€1.00.
B) $1.54/€1.00.
C) $1.27/€1.00.
D) $1.62/€1.00.
66) Assuming that the bond sells at par, the implicit $/£ exchange rate at maturity of a British
pound—U.S. dollar dual currency bond that pays £581.40 at maturity per $1,000 of par value is
A) $1.95/£1.00.
B) $1.72/£1.00.
C) $1.58/£1.00.
D) $0.5814/£1.00.
67) Your firm has just issued five-year floating-rate notes indexed to six-month U.S. dollar
LIBOR plus 1/4 percent. What is the amount of the first semi-annual coupon payment your firm
will pay per U.S. $1,000 of face value, if six-month LIBOR is currently 7.2 percent?
A) $36.00
B) $37.25
C) $74.50
D) none of the options
68) Which of the following is not one of the five main sovereign rating factors?
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A) Religiosity assessment
B) Institutional assessment
C) Economic assessment
D) Monetary assessment
69) Which of the following best reflects a country’s ability to obtain funds from abroad
necessary to meet its public- and private-sector obligations to nonresidents?
A) Fiscal assessment
B) External assessment
C) Monetary assessment
D) Institutional assessment
70) The fiscal assessment considers
A) fiscal flexibility.
B) long-term fiscal trends and vulnerabilities.
C) debt structure.
D) all of the options
71) Which of the following factors is not considered in the fiscal assessment?
A) Equity structure
B) Fiscal flexibility
C) Debt structure
D) Funding access
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72) The extent to which a sovereign’s monetary authority can fulfill its mandate while
supporting sustainable economic growth and attenuating major economic or financial shocks is
best described as the
A) external assessment.
B) monetary assessment.
C) institutional assessment.
D) fiscal assessment.
73) A potentially significant factor in slowing or preventing a deterioration of sovereign
creditworthiness in times of stress is (are)
A) stringent monetary policy.
B) flexible monetary policy.
C) large credit lines.
D) liquid assets.
74) What type of economies tend to produce higher wealth levels because they enable more
efficient allocation of resources to promote sustainable, long-term economic growth?
A) Centrally planned
B) Command
C) Market-oriented
D) none of the options
75) Which of the following reflects the sustainability of a sovereign’s deficits and debt
burden?
A) Institutional assessment
B) External assessment
C) Fiscal assessment
D) Monetary assessment
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76) “Investment grade” ratings are in these categories.
A) Moody’s: AAA to BBB and S&P Global Ratings: Aaa to Baa
B) Moody’s: Aaa to Baa and S&P Global Ratings: AAA to BBB
C) Moody’s: AAA to A and S&P Global Ratings: Aaa to A
D) Moody’s: Aaa to A and S&P Global Ratings: AAA to A
77) S&P Global Ratings has, for years, provided credit ratings on international bonds.
A) The ratings reflect the safety of principal for a U.S. investor.
B) Their ratings reflect the creditworthiness of the borrower and not exchange rate
uncertainty.
C) Their ratings reflect creditworthiness of the lender and predict the exchange rate
expected to prevail at maturity.
D) The ratings are biased since 40 percent of Eurobond issues are rated AAA and 30
percent are AA.
78) A disproportionate share of Eurobonds have high credit ratings in comparison to
domestic and foreign bonds. (Approximately 40 percent of Eurobond issues are rated AAA and
30 percent are AA). Explanations for this include
A) the issuers receiving low credit ratings invoke their publication rights and have had
them withdrawn prior to dissemination.
B) the Eurobond market is accessible only to firms that have good credit ratings and
name recognition to begin with; hence, they are rated highly.
C) there is “grade inflation” on the part of the bond rating agencies which are paid by
the issuers and have to compete for business.
D) Both A and B
79) The credit rating of an international borrower
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A) depends on the volatility of the exchange rate.
B) depends on the volatility, but not absolute level, of the exchange rate.
C) is usually never higher than the rating assigned to the sovereign government of the
country in which it resides.
D) is unrelated to the rating assigned to the sovereign government of the country in
which it resides.
80) Investors in corporate bonds would still be interested in sovereign credit ratings
A) because the sovereign credit rating usually represents a ceiling on corporate credit
ratings within that country.
B) because they might play the TED spread.
C) because they are the rating assigned by the country’s regulators.
D) none of the options
81) One of the five main sovereign rating factors, institutional assessment, comprises an
analysis of how a government’s institutions and policymaking affect a sovereign’s credit
fundamentals by
A) delivering sustainable public finances.
B) promoting balanced economic growth.
C) responding to economic or political shocks.
D) all of the options
82) The key driver of a sovereign’s economic assessment is
A) income levels.
B) growth prospects.
C) economic diversity and volatility.
D) all of the options
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83) In any year, the Eurobond segment of the international bond market accounts for
approximately what percent of new bond offering?
A) 10 percent
B) 25 percent
C) 50 percent
D) 80 percent
84) The underwriting syndicate of a bond offering is
A) a group of investment banks, merchant banks, and the merchant banking arms of
commercial banks that agree to buy the bond from the issuer and then resell it.
B) a group of investment fund managers, brokers, and dealers who specialize in the
secondary bond market.
C) a group of investment banks, merchant banks, and the merchant banking arms of
commercial banks that specialize in some phase of a public issuance.
D) none of the options
85) The lead manager will sometimes invite co-managers to form a managing group to:
A) help negotiate terms with the borrower
B) ascertain market conditions
C) manage the issuance
D) all of the options
86) Underwriters for an international bond issue will commit their own capital to buy the
issue from the borrower at a discount from the issue price. The discount, or underwriting spread,
is typically
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A) in the 1 to 1.5 percent range.
B) in the 2 to 2.5 percent range.
C) in the 3 to 3.5 percent range.
D) in the 4 to 4.5 percent range.
87) Underwriters for a domestic bond issue will commit their own capital to buy the issue
from the borrower at a discount from the issue price. The discount, or underwriting spread, is
typically
A) in the 1 to 1.5 percent range.
B) in the 2 to 2.5 percent range.
C) in the 3 to 3.5 percent range.
D) in the 4 to 4.5 percent range.
88) The role of an underwriter is to
A) help negotiate terms with the borrower.
B) ascertain market conditions.
C) manage the issuance.
D) all of the options
89) The secondary market for Eurobonds
A) is an over-the-counter market.
B) is an organized exchange.
C) has never developed—there is only a primary market for Eurobonds.
D) none of the options
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90) Eurobond market makers and dealers are members of the __________, a self-regulatory
body based in Zurich.
A) International Currency Market Association (ICMA)
B) International Bond Marketers Association (IBMA)
C) International Bond Regulators Association (IBRA)
D) International Capital Market Association (ICMA)
91) In the bond market, there are brokers and market makers. Which of the following are
true?
A) Brokers accept buy or sell orders from market makers and then attempt to find a
matching party for the other side of the trade; they may also trade for their own account.
B) Brokers charge a small commission for their services to the market maker that
engaged them.
C) Brokers do not deal directly with retail clients.
D) all of the options
92) Market makers in the secondary bond market
A) stand ready to buy or sell for their own account.
B) quote bid and ask spreads.
C) trade directly with one another, through a broker or with retail customers.
D) all of the options
93) With regard to clearing procedures for bond transactions
A) it is a system for transferring ownership of bonds.
B) it is a system for ensuring payment from buyers to sellers.
C) most Eurobond trades clear through two major clearing systems.
D) all of the options
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94) With regard to clearing procedures for bond transactions, when a transaction is
conducted, electronic book entries are made that transfer book ownership of the bond certificates
from the seller to the buyer and transfer funds from the purchaser’s cash account to the seller’s.
However,
A) physical transfer of the bonds seldom takes place.
B) the physical transfer of the bonds takes place as much as 3 days later.
C) the physical transfer of the bonds takes place as much as 6 weeks later.
D) the physical transfer of bonds only occurs if the depository banks that physically
store bond certificates are different for the buyer and seller.
95) Two major clearing systems for international bond transactions are
A) Euroclear and Clearstream International.
B) Euroclear and Clearasil.
C) Deutsche Börse Clearing and Cedel International.
D) none of the options
96) A bond market index
A) is a reference rate, like LIBOR, that adjustable rate bonds use to set the coupon.
B) is analogous to a stock market index, but with bond price data instead of stock price
data.
C) represents a price-weighted average of all bonds that exist.
D) none of the options
97) The J. P. Morgan and Company Global Government Bond Index is __________
representation of the individual country government bond indexes.
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A) a value weighted
B) a price weighted
C) an unweighted
D) none of the options
98) The Wall Street Journal publishes daily values of yields to maturity for Japanese,
German, British, and Canadian Government bonds.
A) Bond market participants can thereby compare the yield curve of the various
countries.
B) Bond market participants can thereby compare the term structure of interest rates of
the various countries.
C) Both A and B are correct.
D) none of the options
99) Eurobonds sold in the United States may not be sold to U.S. citizens.
⊚ true
⊚ false
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Answer Key
Test name: chapter 12
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