Dillow Says Lack of Liquidity Creates Investment Opportunities

Dillow Says Lack of Liquidity Creates Investment Opportunities

Assessment

Interactive Video

Business

University

Hard

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The transcript discusses the current state of the credit market, highlighting issues with high yield issuance and dealer inventory. It explores the impact of liquidity changes on corporate credit and the opportunities arising from complex capital structures. The conversation also compares the performance of floating rate credit to fixed rate credit, noting the outperformance of the former as the Fed normalizes rates. The discussion emphasizes the importance of understanding these dynamics in the context of market changes since the financial crisis.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What has been the impact of reduced dealer inventory on high yield issuance?

Increased issuance and tighter spreads

Decreased issuance and wider spreads

Increased issuance and wider spreads

No change in issuance or spreads

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How has the bond market changed since the financial crisis in terms of liquidity?

Liquidity has increased significantly

Liquidity has decreased, reducing opportunities

Liquidity has remained the same

Liquidity has decreased, creating opportunities in stressed situations

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What creates opportunities for investors in complex capital structures?

High dealer inventory

Stable market conditions

Complicated financial packages with multiple holding companies

Simple financial packages

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which type of credit has outperformed in the current year?

Investment grade bonds

Fixed rate credit

Floating rate credit

High yield bonds

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the yield on European investment grade credit after spread widening?

3.0%

0.5%

1.3%

2.5%