pricing-yields-curve — Debt Capital Markets Practice Questions

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1. For a bond with several call dates at different prices, the Yield to Worst is:
2. If an investor buys a bond with a 5% coupon at a price of 102, how does the Yield to Maturity (YTM) compare to
3. What is the primary reason that the Yield to Maturity (YTM) of a premium bond is lower than its Current Yield?
4. A bond's yield to maturity (YTM) is 7%, but its current yiel… — What does this suggest about the bond's curren
5. What is the most accurate description of its Yield to Maturity (YTM)?
6. For a bond trading at a discount (below par), which yield measure is typically the same as the Yield to Worst?
7. If a bond's YTW is significantly lower than its YTM, the bond is likely trading at a:
8. In a stable interest rate environment, which yield measure will fluctuate the most on a day-to-day basis for a
9. The concept of 'Pull to Par' describes the price convergence… — Which yield measure inherently accounts for th
10. If an issuer decides *not* to call a bond on the first call date even though it is economically beneficial to
11. If a bond's Yield to Worst is equal to its Yield to Maturity, what can we likely conclude about the bond's cur
12. Which measure represents the approximate percentage change in a bond's price for a 1 percentage point change i
13. What is the fundamental relationship between a bond's market price and its yield to maturity (YTM)?
14. Which statement is true regarding the YTW calculation?
15. If the calculated yield to maturity (YTM) is 4.80%, the yield to call at year 3 is 3.50%, and the yield to cal
16. If the loan is priced at par with a 1.00% floor and a margin of 400 bps, and the forward curve shows SOFR stay
17. If an FRN is trading at a 'clean price' of 99.00, why is the Discount Margin (DM) used instead of simply citin
18. What happens to the interest expense of a company when it draws a portion of its Revolving Credit Facility?
19. Which of the following best defines the Z-spread of a corporate bond?
20. If a bond is trading at 102.00 and its call price is 102.00, why might the YTW still be lower than the coupon
21. If the 9-year point on the curve is 4.30%, what is the 'breakeven' yield rise over a one-year horizon (assume
22. How does 'Key Rate Duration' differ from 'Effective Duration' when analyzing a bond portfolio?
23. Why is 'Negative Convexity' a characteristic of callable bonds when interest rates fall?
24. If 60 days have passed since the last coupon in a 180-day period (30/360 convention), what is the dirty price
25. If the market requires a nominal annual yield of 5.00%, what is the price of the bond?
26. Which of the following describes the 'negative basis' trade?
27. A 30-year bond is issued by a sovereign. A 'liability-driven' investor (LDI), such as a pension fund, is the m
28. Which entity was primarily responsible for leading the transition from USD LIBOR to SOFR in the United States?
29. Which spread measure is defined as the constant spread added to the entire benchmark spot curve to match a bon
30. Which of the following semi-annual calculations correctly identifies the price?