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. How do rating agencies such as S&P or Moody's typically view the issuance of PIK debt?
3. What is a 'Borrowing Base' as it relates to certain types of Revolving Credit Facilities?
4. Which entity is the most common lender for a Revolving Credit Facility?
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 is a primary reason a corporation might issue 'Senior Non-Preferred' debt?
8. Which of the following conditions would most likely favor this strategy?
9. What is the primary collateral underlying the Secured Overnight Financing Rate (SOFR) in a floating-rate loan?
10. In a 'Uniform-Price' (Dutch) Auction for government bonds, what yield do all successful bidders receive?
11. In Debt Capital Markets, what is the primary function of the 'Secondary Market'?
12. What is the result of subtracting the 'Bid' price from the 'Ask' price in a secondary market quote?
13. Which role inside an investment bank is primarily responsible for buying and selling bonds in the secondary ma
14. Portability is often described as 'giving the sponsor an exi… — How does this impact the secondary market trad
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