CFA Level I · CFA Level I Exam · Fixed-Income Markets for Government Issuers
A sovereign issuer sells a bond and the proceeds are legally earmarked for financing projects with environmental benefits. This bond is best described as a:
This is a green bond, a sovereign or other issuer's debt whose proceeds are earmarked for projects with environmental benefits. A sukuk is defined by its Sharia-compliant asset structure and a zero-coupon bond by the absence of coupons, not by how proceeds are used.
- Asukuk with an asset-leasing structure
- Bgreen bondCorrect
- Czero-coupon bond
Explanation
A bond whose proceeds are earmarked for environmentally beneficial projects is a green bond. A sukuk is a Sharia-compliant structure based on assets, and a zero-coupon bond is defined by lack of periodic coupons, not use of proceeds.
Did you get it right without looking?
One question tells you little. A timed set on Fixed-Income Markets for Government Issuers shows your real accuracy, how long you take and where you lose marks.
More Fixed-Income Markets for Government Issuers questions
- Which of the following is the most likely issuer of supranational bonds?
- A government agency is created by a national government to fund housing, and its bonds are not explicitly guaranteed by the government. Comp…
- A country has a fixed exchange rate against a major currency. Its foreign reserves are declining steadily and its central bank is defending …
- An analyst compares two sovereigns with similar debt-to-GDP ratios. Country X issues most debt in its domestic currency to domestic investor…
- A sovereign issuer borrows in its own currency and has a floating exchange rate. Compared with a sovereign that borrows mainly in a foreign …
- A municipality in a developed market issues a bond to fund a new toll bridge. Interest and principal will be paid solely from the toll reven…