Monday, March 23, 2015

44 Free CFA Practice Exams Level 1 Questions and Answers on Fixed Income

Following are 44 Free CFA Practice Exams Level 1 Questions and Answers on Fixed Income for your smart and effective learning strategy. Those CFA exam questions and answers are packed with invaluable information to anyone who are planning to pursue their finance and investment career. They already implement an incredible function of touching all the corner of content on fixed income and stay tuned with the most updated knowledge in this topic. Additionally, they are geared towards the development of logical thinking in the nice format. As such, make sure to provide you with an amazing testing experience and CFA certification under your belt in the future. Take it to achieve an expected exam results and compare end-of-test answers with each other in the comment box below!
To view full questions and answers, please kindly visit our site:  http://cfaexampreparation.com/848/44-free-cfa-practice-exams-level-1-questions-and-answers-on-fixed-income/

Callable Bondsif interest rates go down or credit rating goes up, issuer wants ability to refinance at lower rate. Favors the issuer. Negative Convexity. Price goes down by the value of the call option, yield goes up. Bondholders are left with reinvestment risk.Options held by issuer reduce the value of the bondValue of a Non-callable Bond > Value of the Callable BondDifference is the value of the embedded call optionYield on a callable bond = Yield on non-callable + yield of the call optionLockout perio
TIPS treasury inflation protectoin securities. Coupon rate goes up when inflation goes up.
Securitized Risks are collateralized less riskNon-securitized - higher risk - higher rate
Not the issuerLower price, more risk, better profit
- Convertible to stock- useful when the stock does well- conversion ratio = par value / strike price- conversion value = market value of the shares converted- conversion premium = price of convertible bond - price of conversion value- conversion parity = conversion value = no premium. above or below parity
Floor (good for holder) or ceiling (good for investor)collared - floor and ceiling
Contingent Convertible
- tax prorate gain or loss
portion of the principal is repaid every yearcredit risk goes downinvestment risk goes up
aka Face, Redemption, Maturity value- Principal- Bond price quoted as % of par- >100% = premium. Built-in loss. So coupon rate is below market - = 100% = par. coupon rate is same as market- <100% = discount, builit-in gain, coupon rate is above market
- longer term, greater risk- one year or less - money market security- more than one year - capital market security- perpetual
- Receivables- AssetsBoth reduce in value when currency drops
-SPV that buys the loan from the originator- originator gets cash- SPC issues bonds to investors sto raise the capital- bond holder supply the money to the SPV- the loans are the collateralIf Bond Holders don't received P&I from SPC, the pool of loans is security for the debtCreditors of the Originators cannot seize the loansBondholders cannot seize the assets of the originator in the event the SPV is bankrupt- Usually amortized: payments include principal and interest. Lot of cash flow => reinvestment r
Issuer, maturity, par value, coupon rate and frequency, currency
...
- issued simultaneously in different parts of the world- legal and tax consequences
Entire principal paid only at maturityhigher credit risk
Posted by at No comments:
Labels: , , , , ,

19 Free CFA Practice Exams Level 1 Questions and Answers on Fixed Income

Let’s practise our following constantly up-to-date questionaires of fixed income for your excellence study plan from here and now. 19 Free CFA Practice Exams Level 1 Questions and Answers on Fixed Income is based on the way to develop your ability and skills on comprehending, analyzing and problem-solving in your career later. One more thing is that it’s set up nicely with one simple click for each multiple choice question and followed by instant answers at the end of the test. By that, it is quite naturally understandable and comprehensive even for people who do not have a good grounding of this topic. Hurry to test the free CFA sample questions to become excellent at the next exam and early get a triumph over other candidates. Wish you best luck!
 To view full questions and answers, please kindly visit our site: http://cfaexampreparation.com/845/19-free-cfa-practice-exams-level-1-questions-and-answers-on-fixed-income/

D x yield chg in decimal
%chg bond price/yield chg in decimal
[1+(semiannual pay YTM/s)]^2 -1
yield on higher yield bond-yield on lower yield bond
duration x .0001 x bond value
subject bond yield/yield on benchmark bond
taxable yield (1-t)
(bond price when yields fall - bond price when yields rise)/(2 x initial price x decimal chg in YTM)
1f2= ((1+s3)^3)/((1+s2)2) -1
Option free bond-value of call
absolute yield spread/yield on benchmark bond
w1d1+w2d2...
(stated cpn rate/2) x inflation adj par value
clean price+ accrued interest
intrinsic value+time value
S3=[(1+1f0)(1+1f1)(1+1f2)]^1/3 -1
(taxfree yield)/(1-t)
sqrt(1+annual pay YTM)x2
Posted by at No comments:
Labels: , , , , ,

105 Effective Free CFA Practice Exams Level 1 Questions and Answers on Fixed Income

If you are seeking for an online testing database for your CFA exams, 105 Effective Free CFA Practice Exams Level 1 Questions and Answers on Fixed Income is one of the best ideal choice for you at present. Although some test-takers say that they must pay the testing fee online in order to take all the questions, our site develops in a convenient approach ensure everyone to get full knowledge on fixed income in the straight-to-the-point and easy-to-understand way. Consequently, you will digest the dry material and closely follow up the extensive content by daily practice. Surely, these free CFA practice questions online will give you more essential-to-explore experience in the learning process. Take it now and wish you a successful career.
To view full questions and answers, please kindly visit our site:  http://cfaexampreparation.com/842/105-effective-free-cfa-practice-exams-level-1-questions-and-answers-on-fixed-income/

1) bond with prepayment options2)floating-rate debt (coupon is dependent on future rates)3)Bond is convertible/exchangeable (dependent on pricing of other variable)
Same as market segmentation (supply and demand) theory, but investors can be influenced to move from preferred maturity range when yields are sufficiently higher in other maturity ranges.
quoted in % and 32nds of 1% of face value form. i.e. quote of 102-5 means = 102% plus 5/32% of par, which for $100,000 par t-bond is 1.0215625 x 100,000
Refers to the spread between yields for 2 like securities with different ratings, therefore showing the risk-return needed for different ratings. Moves relative to economic health
Yield on a callable bond trading at a premium. Same calculation at standard TVM in calculator, except substitute PAR VALUE (FV) with the call price and N periods with the # of periods until call date(semiannual)-Yield to First Par Call is same as above except until first call date at par value
-2 identical bonds w/ one with longer maturity = greater duration because it will have greater % change in value for a given change in yield-2 identical bonds w/ one with higher coupon = lower duration and price changes less for given change in yield
1)discount rate - rate at which banks can borrow from fed. Affects all other lending rates.2)open market ops - buying/selling tres (most common)3)bank reserve requirements - limits effecting lending amounts4)persuading banks on their credit policies - loosen/tighten lending
1) high coupons because there's more cash flow to reinvest2) long maturities because more of the total value of the investment is in the coupon cash flows (and interest on those cash flows)
step ups - coupon increasesinverse floaters- coupon rate inverse to reference rate movementsdeleveraged floaters - coupon rate = fraction of reference rate plus constant margindual-indexed floaters - coupon rate based on difference between 2 reference ratesrange notes - coupon rate = reference rate if it is within a range, 0 if outside the rangeindex amortizing notes - coupon rate is fixed but some principal is repaid before maturity, with the amount of principal prepaid based on the level of ref rate.
approx. % change in security price for a 1% yield change.Duration = % change in bond price / % change in yieldzero-coupon bond duration approx = years to maturityfloater duration approx = fraction of a year until next coupon reset dateConversely, % change bond price = - duration x change in yield
Posted by at No comments:
Labels: , , , , ,

30 Free Sample Level 1 CFA Exam Questions and Answers on Fixed Income Words

30 Free Sample Level 1 CFA Exam Questions and Answers on Fixed Income Words excels in depth of basic content on this topic, directing you to pass CFA examinations. The feature to this effective free CFA practice questions is well-organized questions mimicking the multiple choice format of the actual exam are followed with full answers after submitting all. As such, you can refresh your practice time without any fear or anxiety within testing. Also, the test lets you know where you are in your study and reinforces your greatest understanding of this subject as much as possible. Why don’t you try it now to tell us what you think about it? Hope you love it!
To view full questions and answers, please kindly visit our site: http://cfaexampreparation.com/878/30-free-sample-level-1-cfa-exam-questions-and-answers-on-fixed-income-words/

Earnings of a firm as reported on its income statement.
The amount of variability present without comparison to any reference point or benchmark.
The number of observations in a given interval (for grouped data).
Managers who hold portfolios that differ from their benchmark portfolio in an attempt to produce positive risk-adjusted returns.
A model that specifies an asset's intrinsic value.
Wall Street expression for buying on a large scale over time, typically by an institution. "Accumulation" of a stock is said to occur if a number of institutions are gradually adding to their holdings.
Return on a stock beyond what would be predicted by market movements alone. Cumulative abnormal return (CAR) is the total abnormal return for the period surrounding an announcement or the release of information.
Attempts to achieve portfolio returns more than commensurate with risk, either by forecasting broad market returns or by identifying particular mispriced sectors of a market or securities in a market.
The hierarchy whereby claims are satisfied in corporate liquidation.
Amounts owed to a company by customers as a result of delivering goods or services and extending credit in the ordinary course of business. Also referred to as trade receivables.
Estimates of items such as the useful lives of assets, warranty costs, and the amount of non-collectible receivables.
The ability to terminate a project at some future time if the financial results are disappointing.
The company in a merger or acquisition that is acquiring the target.
Cumulative gains or losses reported in shareholder's equity that arise from changes in the fair value of available-for-sale securities, from the effects of changes in foreign-currency exchange rates on consolidated foreign-currency financial statements, from certain gains and losses on financial derivatives and from adjustments for underfunded pension plans.
Interest earned but not yet paid.
The return on a portfolio minus the return on the portfolio's benchmark.
In the context of the Treynor-Black model, the portfolio formed by mixing analyzed stocks of percieved nonzero alpha values. This portfolio is ultimately mixed with the passive market index portfolio.
The standard deviation of active returns.
Posted by at No comments:
Labels: , , , , ,

49 Free Sample Level 1 CFA Exam Questions and Answers on Fixed Income

Below are 49 Free Sample Level 1 CFA Exam Questions and Answers on Fixed Income for your comfortable experience of exam study. Numerous CFA sample exam questions free are entirely designed from trustworthy study material and nicely formatted with sufficient questions and prompt respondus in order that it is geared towards your practice with pleasure. Besides, the background is simple but inspiring a lot to help you easily grasp the basic concepts. Appealing to this free online is also its excellence in introduction to this topic and bettering your understanding. Finish it to get the maximum points on this topic. Wish those are what you are looking for!
To view full questions and answers, please kindly visit our site: http://cfaexampreparation.com/875/49-free-sample-level-1-cfa-exam-questions-and-answers-on-fixed-income/

Indicates point in time where coupon reinvestment risk and market price risk offset eachother (Duration = 0).
capture the effects from changes in a bond's cash flows when the yield changes.Callable bond options reduce Effective Duration
= ½ convexity measure × (ΔYTM)2 × 100
(MDur x spread) + (.5Convexity spread^2)
legal entity used to separate assets used as collateral from those of the company seeking financing through an ABS.
All else equal, has less reinvestment risk and more interest rate risk (duration) than a coupon paying bond
Coupon payments denominated in one currency and par value denominated in another.
Bonds are issued in tranches with varying levels of seniority. Any losses arising from the underlying assets are absorbed first by the tranches with the lowest seniority.
I-Spreads are types of Swap Rates
Refers to a capital structure that includes a high percentage of secured bank debt. A firm with a top-heavy capital structure may be limited in its access to additional bank borrowing, which increases the likelihood of default if the firm encounters financial distress.
have original maturities of one year or less
Covenant that limits upstream cash



Posted by at No comments:
Labels: , , , , ,

33 Free Sample Level 1 CFA Exam Questions and Answers on Fixed Income

What a very high-quality CFA exam questions all in all! 33 Free Sample Level 1 CFA Exam Questions and Answers on Fixed Income is relevant to investment students and anyone working for investment and finance field. All key features in the curriculum are absolutely in harmony with the content in this test. A thorough grasp of this content may help to reinforce your critical thinking and confidently tackle with problems in reality. The balance between theory and application in these free CFA sample questions is also another new we would like to share with you. Adequate questions are showcased in an easy-to-access style to make this test become more perfect and familiar with learners. Hope you fancy it!
 To view full questions and answers, please kindly visit our site: http://cfaexampreparation.com/872/33-free-sample-level-1-cfa-exam-questions-and-answers-on-fixed-income/

a protective put establishes a minimum value for the position when the price of the underlying stock declines, a covered call does not
- heavy supply of new issuance (investment grade) will help spreads contract and enhance return because new primary bond valuations validate and enhance secondary valuations; otherwise, the secondary market lose confirmation
- affecting spread and ability to trade
- An indexer (full replication approach) or enhanced indexer would keep the duration matched to the index.
- can use the entire fixed-income portfolio for active management until the portfolio drops below the safety net level or the terminal value
- it means factors affecting supply and demand within sectors of bond market due to impediments or restrictions on investors from reallocating funds across those bond sectors
- OAS use is limited because default risk is excluded from calculation
- one can purchase a high yield issue, when upgraded, the spread will narrow, resulting in higher liquidity and outperformance
- news issues result result in tightening of spreads and decrease of relative yields
Spread duration measures used for fixed rate bonds include the nominal spread, zero-volatility spread, and option-adjusted spread (OAS).
Posted by at No comments:
Labels: , , , , ,

24 Free Sample Level 1 CFA Exam Questions and Answers on Fixed Income

Fresh to this 24 Free Sample Level 1 CFA Exam Questions and Answers on Fixed Income is the updated information on fixed income, further knowledge to improve your skills, boosting your retention and enriching your knowledge on profession and surrounded environment. Honestly speaking, this is an amazing free CFA sample test online which plays the role in staying tuned about significant issues of fixed income. Moreover, the test is very nicely-organized by free online multiple choice questions and instant answers. So, you can follow up your exam study day by day and find out where are your weaknesses and strengths in order to fulfill before the upcoming exam. Hope it make your big day successful!
To view full questions and answers, please kindly visit our site:  http://cfaexampreparation.com/869/24-free-sample-level-1-cfa-exam-questions-and-answers-on-fixed-income/

sector risk- prepayment risk- convexity risk
- if spread is to widen, buy short duration, sell longer duration
- is used when there is concerns about economy slowing down
- the analysis divides the yields on corporate bonds by the yields on treasuries
- aka horizon matching- duration matched, first few years would also be CF matched- benefit: provide liquidity in initial period, reduce risk associated with nonparallel shifts in the yield curve
- callable and putable bonds- e.g.if rates are to fall, putable bonds tend to underperform nonputable issues
- increase in new issues tend to decrease relative yields (when rates fall, new issues and refinances occur)
- aka excess achievable return- current immunization rate - minimum acceptable return
3 structural changes are; securities with embedded options at a premium due to scarcity, longer durations at premium due to tendency toward intermediate term, and credit-based derivatives are increasingly used
- it refers to ranking credit sectors, bond structures, issuers, and issues in terms of their expected performance over some future time period
- A and L have the same PV- A and L have the same aggregate duration- the range of the distribution of duration of assets exceeds distribution of liabilities* assumption is parallel shifts
- classic single-period immunization- contingent immunization- multiple liability immunization- CF matching
- durationportfolio value 0.01
Posted by at No comments:
Labels: , , , , ,
Subscribe to: Posts (Atom)