a. Typically, liquidity risk is a. low in both the municipal market and the corporate market. b. high in the agency market and low in the municipal market. c. low in the Treasury market and high in the corporate market. d. high in the Treasury market and low in the corporate market.
b. Which of the following factors are included in the rating analysis of a corporate bond? :I. The issue's indenture provisions :II. The liquidity position of the issuing company :III. The issuing company's relative debt burden :IV. The stability of the company's earnings. a. II, III and IV only b. I, II and III only c. I, II, III and IV d. I and II only
c. Floating rate preferred stock pays a dividend that a. changes within a preset range in response to the consumer price level. b. increases annually with the rate of inflation. c. varies within a preset range in response to changes in Treasury yields. d. varies from year to year as determined by the Board of Directors of the firm.
d. Pass-through securities backed by pools of auto loans, credit card bills, and computer leases are known as a. asset-backed securities (ABSs). b. REIMCs. c. Fannie Mae securities. d. PIK bonds.
e. Which of the following are characteristics of Treasury inflation-protection securities? :I. The par value changes at a rate equal to the rate of inflation. :II. The coupon rate changes at a rate equal to the rate of inflation. :III. Taxes are imposed on the inflation adjustment only at bond maturity. :IV. TIPS help protect investors from capital losses. a. I, II and IV only b. II and III only c. I, III and IV only d. I and IV only.