Podcast
Questions and Answers
What is the term used to describe the amount of interest paid per year on a bond?
What is the term used to describe the amount of interest paid per year on a bond?
- Coupon (correct)
- Redemption date
- Stock value
- Face value
In the context of bonds, what does the term 'nominal' refer to?
In the context of bonds, what does the term 'nominal' refer to?
- The final interest payment
- The amount of stock purchased (correct)
- The price quoted on the New York Stock Exchange
- The amount of interest paid per year
What is the convention for quoting bond prices in the bond markets?
What is the convention for quoting bond prices in the bond markets?
- Per $50 nominal of stock
- Per $1,000 nominal of stock
- Per $10,000 nominal of stock
- Per $100 nominal of stock (correct)
What does the term 'stock' refer to in relation to bonds?
What does the term 'stock' refer to in relation to bonds?
Which term is synonymous with 'maturity date' when discussing bonds?
Which term is synonymous with 'maturity date' when discussing bonds?
How is the market value of a bond holding calculated?
How is the market value of a bond holding calculated?
What is the total value of outstanding debt globally, as mentioned in the text?
What is the total value of outstanding debt globally, as mentioned in the text?
Which entity issues government bonds?
Which entity issues government bonds?
What is the main purpose of issuing a bond?
What is the main purpose of issuing a bond?
What is the primary characteristic of a bond?
What is the primary characteristic of a bond?
Which type of bonds are issued by companies like large banks?
Which type of bonds are issued by companies like large banks?
Why has the difference in value between bonds and equity market capitalisation been closing?
Why has the difference in value between bonds and equity market capitalisation been closing?
What is the primary difference between Treasury bills and Treasury notes?
What is the primary difference between Treasury bills and Treasury notes?
Which type of US Treasury security adjusts its principal value based on the consumer price index (CPI)?
Which type of US Treasury security adjusts its principal value based on the consumer price index (CPI)?
What are the main types of German government bonds mentioned in the text?
What are the main types of German government bonds mentioned in the text?
In the UK, what financial instrument is known as 'gilts'?
In the UK, what financial instrument is known as 'gilts'?
Which type of bond pays interest semi-annually but has a coupon that remains constant while being paid on the changing principal value?
Which type of bond pays interest semi-annually but has a coupon that remains constant while being paid on the changing principal value?
What is the significance of the term 'gilts' for UK government bonds?
What is the significance of the term 'gilts' for UK government bonds?
'Gilt-edged stock' refers to what type of financial instrument historically?
'Gilt-edged stock' refers to what type of financial instrument historically?
What is one of the main advantages of investing in bonds?
What is one of the main advantages of investing in bonds?
What is a significant disadvantage associated with investing in bonds?
What is a significant disadvantage associated with investing in bonds?
What is a common risk associated with holding bonds?
What is a common risk associated with holding bonds?
Which type of government bond risk refers to the possibility that a government might be unable to meet its financial obligations?
Which type of government bond risk refers to the possibility that a government might be unable to meet its financial obligations?
How do bond prices typically react to an increase in general interest rates?
How do bond prices typically react to an increase in general interest rates?
What is early redemption risk in bond investments?
What is early redemption risk in bond investments?
In the context of bond investments, what is seniority risk focused on?
In the context of bond investments, what is seniority risk focused on?
What is the main consequence of a bond suffering from seniority risk?
What is the main consequence of a bond suffering from seniority risk?
How does inflation risk affect the real value of a bond?
How does inflation risk affect the real value of a bond?
Which risk is associated with the ease of converting a security into cash?
Which risk is associated with the ease of converting a security into cash?
What type of bonds are potentially subject to adverse exchange rate movements?
What type of bonds are potentially subject to adverse exchange rate movements?
How do Standard & Poor's and Fitch Ratings refine their credit ratings within a category?
How do Standard & Poor's and Fitch Ratings refine their credit ratings within a category?
What distinguishes investment grade bonds from non-investment grade bonds?
What distinguishes investment grade bonds from non-investment grade bonds?
Why are government bonds issued by Western governments considered major borrowers of money?
Why are government bonds issued by Western governments considered major borrowers of money?
What is the primary characteristic of the US government bond market?
What is the primary characteristic of the US government bond market?
What are US government bonds generally known as?
What are US government bonds generally known as?
What happens to the credit rating of a bond if circumstances change significantly?
What happens to the credit rating of a bond if circumstances change significantly?
How long is the most common maturity for Bunds?
How long is the most common maturity for Bunds?
What is the settlement period for domestic trades?
What is the settlement period for domestic trades?
Which category of bonds is not included in the classifications for Japanese government bonds (JGBs)?
Which category of bonds is not included in the classifications for Japanese government bonds (JGBs)?
What is the typical range of maturities for policy bank bonds in China?
What is the typical range of maturities for policy bank bonds in China?
What are the characteristics of ZCBs (Zero Coupon Bonds) in Japan?
What are the characteristics of ZCBs (Zero Coupon Bonds) in Japan?
How do Inflation-indexed bonds work in Japan?
How do Inflation-indexed bonds work in Japan?
Where do smaller investors submit non-competitive bids for new gilts in the UK?
Where do smaller investors submit non-competitive bids for new gilts in the UK?
In which country's bond market are policy bank bonds quasi-sovereign?
In which country's bond market are policy bank bonds quasi-sovereign?
Which government department manages the issuance of new gilts in the UK?
Which government department manages the issuance of new gilts in the UK?
What settlement period applies to JGB trades in Japan?
What settlement period applies to JGB trades in Japan?
What term is commonly used for instruments with a maturity of less than 12 months?
What term is commonly used for instruments with a maturity of less than 12 months?
In which market do the majority of corporate bond trading activities occur in most developed markets?
In which market do the majority of corporate bond trading activities occur in most developed markets?
What is the key feature that helps differentiate corporate bonds?
What is the key feature that helps differentiate corporate bonds?
What type of bonds are typically listed on stock exchanges?
What type of bonds are typically listed on stock exchanges?
Which term is often applied to debt instruments with a maturity exceeding 12 months?
Which term is often applied to debt instruments with a maturity exceeding 12 months?
What does a company seeking to raise funds through a bond issue often have to provide to assure investors of the bond repayment?
What does a company seeking to raise funds through a bond issue often have to provide to assure investors of the bond repayment?
What is the main benefit to the bank of engaging in securitisation of mortgages?
What is the main benefit to the bank of engaging in securitisation of mortgages?
Which of the following is NOT a form of credit enhancement for mortgage-backed securities?
Which of the following is NOT a form of credit enhancement for mortgage-backed securities?
In securitisation, what role does the special purpose vehicle (SPV) play?
In securitisation, what role does the special purpose vehicle (SPV) play?
What is one notable advantage of asset-backed securities (ABSs) as mentioned in the text?
What is one notable advantage of asset-backed securities (ABSs) as mentioned in the text?
What was a significant consequence of including sub-prime mortgages in bond pools during the sub-prime crisis?
What was a significant consequence of including sub-prime mortgages in bond pools during the sub-prime crisis?
Why did banks start issuing mortgage bonds backed by sub-prime loans?
Why did banks start issuing mortgage bonds backed by sub-prime loans?
How do mortgage-backed securities differ from traditional bonds?
How do mortgage-backed securities differ from traditional bonds?
What is the primary reason for investors to find mortgage-backed bonds attractive?
What is the primary reason for investors to find mortgage-backed bonds attractive?
How are mortgage-backed bonds created through securitisation offered to investors?
How are mortgage-backed bonds created through securitisation offered to investors?
What financial process do mortgage certificates represent?
What financial process do mortgage certificates represent?
What is a potential attraction for an investor holding convertible bonds?
What is a potential attraction for an investor holding convertible bonds?
What could be a consideration for a company issuing preferred bonds?
What could be a consideration for a company issuing preferred bonds?
What distinguishes zero coupon bonds (ZCBs) from other types of bonds?
What distinguishes zero coupon bonds (ZCBs) from other types of bonds?
What is a defining characteristic of asset-backed securities (ABSs)?
What is a defining characteristic of asset-backed securities (ABSs)?
In what scenario would an investor holding convertible bonds rank ahead of existing shareholders?
In what scenario would an investor holding convertible bonds rank ahead of existing shareholders?
What distinguishes preferred bonds from ordinary shares?
What distinguishes preferred bonds from ordinary shares?
Why might investors pay a higher price for convertible bonds?
Why might investors pay a higher price for convertible bonds?
How are zero coupon bonds different in terms of returns compared to traditional coupon-paying bonds?
How are zero coupon bonds different in terms of returns compared to traditional coupon-paying bonds?
What is a key difference between preferreds and senior debt in an issuer's capital structure?
What is a key difference between preferreds and senior debt in an issuer's capital structure?
'Asset-backed securities (ABSs)' are primarily characterized by:
'Asset-backed securities (ABSs)' are primarily characterized by:
What is the primary purpose of yield to maturity in bond investing?
What is the primary purpose of yield to maturity in bond investing?
In what market condition is the yield curve described as 'positive'?
In what market condition is the yield curve described as 'positive'?
Why do investors demand a higher rate of interest for longer maturity bonds according to the text?
Why do investors demand a higher rate of interest for longer maturity bonds according to the text?
What does the term 'yield curve' illustrate in the bond market?
What does the term 'yield curve' illustrate in the bond market?
How does the yield to maturity help investors in bond comparison?
How does the yield to maturity help investors in bond comparison?
What is the purpose of a 'negative pledge' clause in eurobonds issued by companies?
What is the purpose of a 'negative pledge' clause in eurobonds issued by companies?
What is the main advantage of the eurobond market over domestic bond markets for companies?
What is the main advantage of the eurobond market over domestic bond markets for companies?
What is the flat yield of a bond calculated as?
What is the flat yield of a bond calculated as?
What is the yield to maturity of a bond a combination of?
What is the yield to maturity of a bond a combination of?
In what situation would the yield to maturity be less than the flat yield?
In what situation would the yield to maturity be less than the flat yield?
What innovative feature is commonly associated with dual-currency bonds?
What innovative feature is commonly associated with dual-currency bonds?
How are yields on bonds typically measured?
How are yields on bonds typically measured?
What does the investor need to take into account when calculating the 'yield to maturity' of a bond?
What does the investor need to take into account when calculating the 'yield to maturity' of a bond?
'Gilt-edged stock' historically refers to what type of financial instrument?
'Gilt-edged stock' historically refers to what type of financial instrument?
'Convertible bonds' mentioned in the text typically offer what feature?
'Convertible bonds' mentioned in the text typically offer what feature?
What distinguishes covered bonds from asset-backed securities?
What distinguishes covered bonds from asset-backed securities?
Why are covered bonds an important source of term funding for banks in Europe?
Why are covered bonds an important source of term funding for banks in Europe?
What is the defining characteristic of Eurobonds?
What is the defining characteristic of Eurobonds?
In which scenario would a foreign bond typically be issued?
In which scenario would a foreign bond typically be issued?
Why did the Eurobond market expand significantly in the 1970s?
Why did the Eurobond market expand significantly in the 1970s?
Why are Eurobonds named as such despite not being restricted to European financial centers?
Why are Eurobonds named as such despite not being restricted to European financial centers?
Which defining characteristic makes Eurobonds stand out among other types of international bonds?
Which defining characteristic makes Eurobonds stand out among other types of international bonds?
What is a main reason for Eurobonds being a popular choice for multinational companies?
What is a main reason for Eurobonds being a popular choice for multinational companies?
What is a key benefit of Eurobonds for governments when compared to domestic bonds?
What is a key benefit of Eurobonds for governments when compared to domestic bonds?
What risk do investors potentially face when investing in Eurobonds denominated in a foreign currency?
What risk do investors potentially face when investing in Eurobonds denominated in a foreign currency?
What is the main benefit for bondholders when security is offered over an issuer's assets?
What is the main benefit for bondholders when security is offered over an issuer's assets?
What distinguishes fixed security from floating charge as forms of security for corporate debt?
What distinguishes fixed security from floating charge as forms of security for corporate debt?
What is the purpose of a call provision in a corporate bond?
What is the purpose of a call provision in a corporate bond?
What feature makes Medium-Term Notes (MTNs) different from other debt instruments?
What feature makes Medium-Term Notes (MTNs) different from other debt instruments?
What determines the interest rate on Floating Rate Notes (FRNs)?
What determines the interest rate on Floating Rate Notes (FRNs)?
What is a sinking fund requirement associated with in corporate bonds?
What is a sinking fund requirement associated with in corporate bonds?
Why might an issuer find call provisions attractive when issuing corporate bonds?
Why might an issuer find call provisions attractive when issuing corporate bonds?
How do Fixed-Rate Bonds differ from Floating Rate Notes (FRNs)?
How do Fixed-Rate Bonds differ from Floating Rate Notes (FRNs)?
