Fixed Income Securities (FIS)

Which of these bonds has almost zero credit risk and almost zero interest rate risk

• T-bills

• G-secs

• Commercial papers

• (a) and (b)

Which of these bonds carries interest rate risk, but has almost zero credit risk

• T-bills

• G-secs

• Commercial papers

• (a) and (b)

Which of these bonds carries credit risk, but has almost zero interest rate risk

• T-bills

• Corporate Debentures

• Commercial papers

• (b) and (c)

Which of these bonds would generally carry the highest amount of credit risk?

• Government bonds

• Investment Grade bonds

• High yield bonds

• Municipal Bonds

Which of these bonds will generally have the least amount of interest rate risk? (Assume all these four bonds have same maturity, same face value, same issuer and same credit risk)

• Zero Coupon bonds

• Fixed rate bonds

• Floating rate bonds

• Callable bonds

Bond prices behave ________ with interest rates.

• Normally

• Parallel

• Equally

• Inversely

______________ is the risk that a foreign government's actions cause a default or an adverse decline in its bond price.

• Country risk

• Sovereign risk

• Systemic risk

• Macro risk

The easiest way to deal with rising prices is to invest in __________.

• Inflation indexed bonds

• Step up bonds

• Treasury bills

• Floating rate bonds

Which contracts are bilateral agreements in which a party can purchase or sell assets at a certain price on a specific future date?

• Forwards

• Futures

• Swaps

• Options

In an Options contract, the counterparty with an obligation to execute the option is ____.

• Option buyer

• Option seller

• Underwriter

• Settlement Agency