Fixed Income Securities Quiz

Which of the following is NOT a key segment of India's debt market?

• Government securities (G-secs, T-bills, SDLs)

• PSU and bank bonds

• Private sector instruments like bonds and debentures

• Foreign exchange derivatives

What is the maximum number of ISINs that can mature in one financial year for a company?

• 10

• 12

• 15

• 20

When a bond's coupon rate is higher than the prevailing market interest rate, the bond will:

• Sell at par value

• Sell at a discount

• Sell at a premium

• Cannot be determined

Which type of bond gives the issuer the right to redeem the bond before maturity?

• Puttable bond

• Callable bond

• Convertible bond

• Zero coupon bond

Reinvestment risk is highest for investors who:

• Sell bonds before maturity

• Hold bonds till maturity

• Buy zero coupon bonds

• Buy callable bonds

Which risk arises when a company's credit rating is lowered after bond purchase?

• Default risk

• Spread risk

• Downgrade risk

• Call risk

Masala Bonds issued by Indian entities expose which party to exchange rate risk?

• The Indian issuer

• The foreign investors

• Both issuer and investors equally

• Neither party faces exchange rate risk

Which bonds are most affected by volatility risk?

• Government bonds

• Zero coupon bonds

• Bonds with embedded options

• Corporate bonds

What is the typical par value of a Government bond in India?

• ₹10

• ₹100

• ₹1,000

• ₹10,000

When a bond trades at 106.35, it means:

• The bond is priced at ₹106.35

• The bond is priced at 106.35% of face value

• The bond yield is 6.35%

• The bond has 6.35 years to maturity