Medium Debt Capital Markets Practice Questions

299 free medium-difficulty Debt Capital Markets questions, drawn live from KomFi's calibrated bank. The exam backbone: the difficulty band where most scoring happens.

1. If a company has a leverage-based pricing grid and SOFR rises significantly while leverage stays the same, wha
2. What is meant by the 'bond floor' in the context of yield analysis?
3. Which of the following describes a 'step-up' coupon in a callable bond?
4. If a bond has a 'Par Call' feature starting 6 months before maturity, what does this mean?
5. What is the main disadvantage for an issuer when using a 'make-whole' call instead of a 'fixed-price' call?
6. What is meant by the term 'compounding in arrears' for a SOFR-based floating-rate note?
7. Which feature of a covered bond provides 'dual recourse' to the investor?
8. Which term describes the phenomenon where the principal of a PIK bond grows because interest is added to it ra
9. Which of the following best describes the 'Term Loan B' (TLB) in a leveraged finance stack?
10. An institutional investor is evaluating a 5-year Floating-Ra… — If the market's required DM for this credit re
11. If all other factors remain constant, how has the Discount Margin (DM) changed?
12. Which component of the Discount Margin calculation is affected by the choice of day-count convention (e.g., Ac
13. If a 5-year FRN is issued with an Original Issue Discount (OID) at a price of 99.00 and a quoted margin of 400
14. Why is the 1-year call likely to be the YTW?
15. What happens to the YTW of a callable bond if the issuer's credit spread narrows significantly while benchmark
16. Which of the following best defines the 'Credit Spread Adjustment' (CSA) in the context of the LIBOR fallback
17. In the transition from LIBOR to SOFR, which of the following is a fundamental structural difference in the way
18. In bank capital, which layer is characterized by discretionary, non-cumulative coupons and the ability to be w
19. What is the primary difference between SOFR and the now-discontinued LIBOR benchmark?
20. What happens to a 'Lien' if the underlying debt is refinanced?
21. In a standard high-yield Restricted Payments covenant, which of the following is typically credited to the 'Av
22. In a 'Restricted Payments' covenant, which of the following is NOT a usage of the builder basket?
23. A corporate hybrid security is issued as a perpetual bond wi… — If the rating agencies grant '50% equity credi
24. An investor buys a 10-year bond at a price of 90.00. Over one year, the bond's yield remains unchanged, but th
25. Which statement accurately describes the impact on the borrower's periodic cash flow and refinancing risk?
26. Which spread measure is most appropriate for comparing a bond with an embedded call option to a similar bond w
27. In a CLO structure, what is the role of the 'Overcollateralization (OC) Test'?
28. In the bank capital hierarchy, which instrument is characterized by having discretionary, non-cumulative coupo
29. In a CLO (Collateralized Loan Obligation) structure, what occurs if the Overcollateralization (OC) test for th
30. If it is callable in 5 years at $102, what is the Yield to Call (YTC)?

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