FINRA Municipal Securities and Fixed Income Flashcards

Which of the following is a characteristic of a 'serial' municipal bond offering?

Answer: Bonds mature in scheduled annual installments over several years

In a serial bond offering, portions of the total debt mature each year, spreading repayment over time rather than in one lump sum.

What is 'duration' as it relates to fixed income securities?

Answer: A measure of a bond's price sensitivity to changes in interest rates

Duration measures how sensitive a bond's price is to interest rate changes; a higher duration means greater price volatility when rates change.

Under MSRB Rule G-17, a municipal securities dealer must deal fairly with all persons and not engage in:

Answer: Deceptive, dishonest, or unfair practices

MSRB Rule G-17 requires dealers to deal fairly and prohibits deceptive, dishonest, or unfair practices in connection with municipal securities transactions.

A 'term' municipal bond structure means that:

Answer: All bonds in the issue mature on a single future date

A term bond issue has all bonds maturing on the same date, in contrast to serial bonds that mature in stages.

What is a 'sinking fund' in the context of municipal bonds?

Answer: A reserve fund used to retire debt over time through periodic payments

A sinking fund is a reserve established by the issuer, funded through regular payments, specifically to retire outstanding bond principal over time.

Which exam would a person need to pass to become a Municipal Fund Securities Limited Principal?

Answer: Series 51

The Series 51 exam qualifies individuals as Municipal Fund Securities Limited Principals, overseeing the sale of 529 college savings plans and similar products.