Questions from General Investment

Q: What are the special tax features of (a) Treasury securities

What are the special tax features of (a) Treasury securities, (b) agency issues, and (c) municipal bonds?

Q: Describe an asset-backed security (ABS), and identify some

Describe an asset-backed security (ABS), and identify some forms of collateral used with these issues. Briefly note how an ABS differs from an MBS. What is the central idea behind securitization?

Q: What’s the difference between dollar-denominated and non-dollar-

What’s the difference between dollar-denominated and non-dollar-denominated (foreign-pay) bonds? Briefly describe the two major types of U.S.-pay bonds. Can currency exchange rates affect the total re...

Q: You invest $5,115 in stock and receive dividends of

You invest $5,115 in stock and receive dividends of $50, $55, $60, and $65 over the following four years. At the end of the four years, you sell the stock for $5,300. What was the IRR on this investme...

Q: What is a convertible debenture? How does a convertible bond differ

What is a convertible debenture? How does a convertible bond differ from a convertible preferred?

Q: Identify the equity kicker of a convertible security, and explain how

Identify the equity kicker of a convertible security, and explain how it affects the value and price behavior of convertibles.

Q: Explain why it is necessary to examine both the bond and stock

Explain why it is necessary to examine both the bond and stock properties of a convertible debenture when determining its investment appeal.

Q: What is the difference between conversion parity and conversion value? How

What is the difference between conversion parity and conversion value? How would you describe the payback period on a convertible? What is the investment value of a convertible, and what does it revea...

Q: How would you describe the behavior of market interest rates and bond

How would you describe the behavior of market interest rates and bond returns over the past 50 years? Do swings in market interest rates have any bearing on bond returns? Explain.

Q: Identify and briefly describe the five types of risk to which bonds

Identify and briefly describe the five types of risk to which bonds are exposed. What is the most important source of risk for bonds in general? Explain.