All else the same, the existence of a will result in a higher required return on a bond. a.call provision b.collateral requirement c.sinking fund d.protective covenant e.high quality rating
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- A funding component is O the total funding required for a specified decision point O a long-term source of capital O a collateral agreement, such as pledging an asset as security for a mortgage bond O an ancillary requirement on a loan that affects its risk, such as a restrictive covenant1. A bond investment that satisfies the amortized cost measurement may be designated a. Revocably at fair value through profit or loss b. Irrevocably at fair value through profit or loss c. Irrevocably at fair value through OCI d. Irrevocably at amortized costA bond investment that satisfy the amortized cost measurement may be designated a. irrevocably at either fair value through other comprehensive income or fair valiue through profit or loss. b. irrevocably at fair value through other comprehensive income c. revocably at fair valiue through profit or loss. d. irrevocably at fair value through profit or loss
- Explain the following in one or two sentence a. Callable bond b. Puttable bond c. Redeemable bond d. Irredeemable bond e. Call option f. Put optionin the 5 c's of stracturing a loan approval, what fundamental piece do you think it ignore or fall to highlight? capacity capital collateral conditions character ThanksWhen do you release a performance guarantee/bond?
- Explain the following in one or two sentence a. Callable bond b. Puttable bond c. Redeemable bond d. Irredeemable bond e. Call option f. Put option Answer d , e and fWhich of the following risks cannot be hedged?A. CreditB. LiquidityC. CurrencyD. DurationWhich of the following are all traditional credit risk enhancement techniques? Group of answer choices B. Collateral, transparency, early termination, bond insurance C. Marking to market, netting, guarantees, reassignment D. Bond insurance, netting, disintermediation, put options A. Put options, netting, bond insurance, derivatives
- Counterparty credit risk is a function of the probability of default, exposure at default, and loss given default. Assuming that the individual exposure at default with a counterparty is fixed, which of the following statements is correct? A. The probability of default can be mitigated by collateral, and exposure at default can be mitigated by netting. B. The probability of default can be mitigated by netting, and exposure at default can be mitigated by collateral. C. Loss given default can be mitigated by collateral, and exposure at default can be mitigated by netting. D. Loss given default can be mitigated by netting, and exposure at default can be mitigated by collateral.Can you explain Collateralized debt obligation WI9TH AN EXPAMPLE? WHICH WILL HELP IN THE PRESNTATIONOn January 1, 2020, Beckham acquired a 2,000,000, 5 year bond, 10% bond for 2,169,329. Transaction cost is 4,500. The ongoing interest rate on the date of the acquisition of the bonds was 7.8859%. The fair value of the bond at the end of each year are listed below: Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 101 98 105
