Questions from Financial Markets


Q: Describe the process for valuing a bond.

Describe the process for valuing a bond.

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Q: What is meant by the “yield to maturity” on a

What is meant by the “yield to maturity” on a bond?

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Q: Briefly describe the types of risk faced by investors in domestic bonds

Briefly describe the types of risk faced by investors in domestic bonds. Also indicate the additional risks associated with nondomestic bonds.

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Q: What risk does a zero-coupon bond address?

What risk does a zero-coupon bond address?

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Q: According to the behavior of interest rates were investors more concerned or

According to the behavior of interest rates were investors more concerned or less concerned about risk over the 2002-2006 time period? Explain.

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Q: What does it mean with the horizon spreads in dip below the

What does it mean with the horizon spreads in dip below the X-axis? Why do some feel that this was not to be the case in 2006?

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Q: How do you think credit spreads behave over the course of the

How do you think credit spreads behave over the course of the economic cycle?

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Q: 1. Which of the following is NOT a primary market function

1. Which of the following is NOT a primary market function of investment banks? a. Originating new securities issues b. Underwriting new issues c. Selling newly issued securities to investors d. As...

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Q: What is a “flight to quality”? Under what economic conditions

What is a “flight to quality”? Under what economic conditions might we see this?

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Q: Why would firms raise capital in markets other than their domestic or

Why would firms raise capital in markets other than their domestic or home market?

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