Question 106 Recent economic data suggest an increasing likelihood that the economy will soon enter a recessionary phase. What is the most likely effect on the yields of lower-quality corporate bonds and on credit spreads of lower-quality versus higher-quality corporate bonds? Yields Credit Spreads A) Increase Increase B) Increase Decrease C) Decrease Increase D) Decrease Decrease
Question 107 Which of the following statements regarding floating-rate securities is most accurate? A) The longer the time until the next reset for a floating-rate security, the less interest rate risk it has. B) A floating-rate security’s price will always equal par at its coupon reset date. C) Prices of floating-rate securities are less sensitive to changes in market yields than the prices of fixed-rate securities. D) Interest rate risk increases as a floating-rate security’s reset date approaches.
Question 108 Which of the following statements is most accurate concerning the differences between modified convexity and effective convexity? A) Modified convexity is not appropriate for option-free bonds. B) Modified convexity takes into account changes in cash flows due to embedded options, while effective convexity does not. C) For an option-free bond, modified convexity is slightly greater than effective convexity. D) Effective convexity is most appropriate for bonds with embedded options.
Question 109 A decrease in mortgage interest rates will most likely have what effects on the values of interest-only and principal-only strips? Interest-only Principal-only A) Decrease Increase B) Increase Increase C) Increase Decrease D) Decrease Decrease
Question 110 The risk that an investor is unable to sell a security quickly and at a fair price is best described as: A) default risk. B) reinvestment risk. C) call risk. D) liquidity risk.
[此贴子已经被作者于2008-11-7 17:17:51编辑过] | 
发表于 2008-5-10 13:35
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