Debt Bond Basics

Front 1

Which of the rating agencies listed below would most likely rate a municipal revenue anticipation note for credit risk?

Back 1

Moody's

Front 2

Declining rate of inflation would lead to

Back 2

I higher prices and lowering bond yields

Front 3

Market uncertainty regarding future interest-rate levels would indicate that the yield curve should be

Back 3

Flat

Front 4

A increasing market rate of interest would lead to:

Back 4

Lower bond prices and higher bond yields

Front 5

When it is expected that a recession would occur

Back 5

They yield spread between corporate and government bonds will widen

Front 6

True or false step down certificate of deposit the interest payment will be reduced and the principal payment is fixed

Back 6

True

Front 7

T or F bonds are typically called when interest-rate have fallen allowing the issue to refinance at lower interest cost because of the call risk the risk that a high yield issue can be called away if interest-rate dropped

Back 7

True

Front 8

Which CMO trench is least susceptible to interest-rate risk

Back 8

Floating-rate tranche