Exam 18: Bonds: Analysis and Strategy

Bond investors can avoid the losses caused by rising interest rates by:

Duration is a measure that relates a:

The term structure of interest rates is also known as the:

Which of the following would not be expected to cause yield spreads to widen?

Which form of duration should be used when evaluating a floating-rate bond?

Floating rate bonds often have yields tied to the:

During recessions,yield spreads tend to:

Which of the following 10-year,8% bonds will offer the highest YTM?

Which of the following European countries experienced a debt crisis in recent years?

The introduction of the Euro:

Which of the following is an active bond strategy?

James has a 10-year investment horizon.To achieve an immunized position,his bond portfolio will have an average duration that is:

A bond investor has $100,000 and has determined 5 years is his maximum term.He puts $20,000 in one-year bonds,$20,000 in two-year bonds,etc.up to $20,000 in five-year bonds.This is an example of:

The yield curve is normally plotted using Treasury securities because:

What are the two components of interest-rate risk?How do they work to immunize a portfolio?

During periods of economic expansion,the spread between corporate bonds and U.S.Treasuries generally:

Interest rate risk is composed of:

A coupon bond has 10-years to maturity and a YTM of 8%.If the YTM instantaneously increases to 9%,what happens to the bond's price and duration?

Which form of interest rate forecasting involves evaluating bonds to determine which will perform best over a selected holding period?

A client tells you that he strongly believes that interest rates in general will fall abruptly over the next six months.He asks you to recommend bonds for a portfolio to provide capital gains on the interest rate move.Generally,what would you suggest?What if he expected rates to rise?