secondary-trading-liquidity — Debt Capital Markets Practice Questions

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1. A 'Payment-in-Kind' (PIK) interest feature allows the borrower to do which of the following?
2. Which entity is the most common lender for a Revolving Credit Facility?
3. What is a 'Borrowing Base' as it relates to certain types of Revolving Credit Facilities?
4. How do rating agencies such as S&P or Moody's typically view the issuance of PIK debt?
5. Why did 'Term SOFR' rates become available only after a robust SOFR futures market was established?
6. What is the primary difference between 'Primary' and 'Secondary' debt capital markets?
7. Which of the following conditions would most likely favor this strategy?
8. Why would an investment bank's trading desk prefer to hold 'on-the-run' Treasuries over 'off-the-run' Treasuri
9. Which of the following is a primary reason a corporation might issue 'Senior Non-Preferred' debt?
10. Which role inside an investment bank is primarily responsible for buying and selling bonds in the secondary ma
11. What is the primary collateral underlying the Secured Overnight Financing Rate (SOFR) in a floating-rate loan?
12. What is the result of subtracting the 'Bid' price from the 'Ask' price in a secondary market quote?
13. In Debt Capital Markets, what is the primary function of the 'Secondary Market'?
14. In a 'Uniform-Price' (Dutch) Auction for government bonds, what yield do all successful bidders receive?
15. Why might an investor avoid a 'Deep Discount' bond (OID of 80.00 or lower) despite an attractive yield?
16. If a dealer is looking for the 'Cheapest-to-Deliver' (CTD) bond for a government bond futures contract, which
17. When a specific bond goes 'on special' in the repurchase agreement (repo) market, how does its repo rate typic
18. A company is considering a 'tender offer' alongside a new bo… — What is the most common strategic objective fo
19. If an issuer utilizes portability to avoid a 101% put, but the bonds are trading in the secondary market at 10
20. In the context of the 'Cheapest-to-Deliver' (CTD) bond for a government bond future, which bond in the deliver
21. A dealer must sell a $250mm block of an off-the-run 7y corpo… — Which consideration most sharply determines wh
22. Which statement correctly describes Dealer market?
23. Which statement correctly describes Over-the-counter trading?
24. Which statement correctly describes Bid-ask spread?
25. Which statement correctly describes Immediacy?
26. Beginner debt-markets terminology check.… — Which term matches this definition: “combined cost of buying and t
27. A simple debt-markets situation: the buyer receives the bond… — Which concept is illustrated by this case: “th
28. Which statement correctly describes Repurchase agreement?
29. A simple debt-markets situation: a dealer obtains short-term… — Which concept is illustrated by this case: “a
30. Which statement correctly describes Settlement fail?