Debt Securities and Fixed Income Flashcards
6 cards from real SIE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Debt Securities and Fixed Income flashcards as text
What is the par value of a standard corporate bond?
Answer: $1,000
The standard par value (face value) for a corporate bond is $1,000, which is repaid at maturity.
When interest rates rise, what happens to existing bond prices?
Answer: Bond prices fall
Bond prices and interest rates have an inverse relationship — when rates rise, existing bond prices fall.
What is a callable bond?
Answer: A bond the issuer can redeem before maturity
A callable bond allows the issuer to redeem the bond before its stated maturity date, usually when interest rates decline.
Which type of bond is backed by the full faith and credit of the US government?
Answer: US Treasury securities
US Treasury securities are backed by the full faith and credit of the federal government, making them the safest bonds.
What is the coupon rate of a bond?
Answer: The annual interest rate stated on the bond at issuance
The coupon rate is the annual interest rate fixed at issuance, determining the periodic interest payments.
Zero-coupon bonds are sold:
Answer: At a discount and pay no periodic interest
Zero-coupon bonds are issued at a deep discount and pay no periodic interest, with the investor receiving par at maturity.