CFA Level I · CFA Level I Exam · Fixed-Income Issuance and Trading
Which of the following is most likely a feature of commercial paper as a fixed-income instrument?
Commercial paper is a short-term, typically unsecured instrument issued at a discount to face value and redeemed at par. It is used by corporations for working capital funding. Long-term secured coupon bonds and continuously offered medium-term notes are different instruments.
- AIt is a long-term secured debt with semiannual coupons
- BIt is a short-term unsecured instrument typically issued at a discountCorrect
- CIt is a medium-term note issued continuously through dealers
Explanation
Commercial paper is short-term, usually unsecured, and sold at a discount to face value with maturity commonly under one year. Long-term secured coupon debt and continuously offered medium-term notes are different instruments.
Did you get it right without looking?
One question tells you little. A timed set on Fixed-Income Issuance and Trading shows your real accuracy, how long you take and where you lose marks.
More Fixed-Income Issuance and Trading questions
- Compared with a public offering, a private placement of bonds is most likely to feature:
- A government issues bonds through a single-price auction. Bidders submit competitive bids with yields, and the lowest yields are accepted fi…
- In a syndicated underwriting of a new bond issue, the lead underwriter most likely:
- Compared with a bank's retail deposit funding, wholesale funding sources such as negotiable certificates of deposit are most likely to:
- Which feature most likely makes a bond more liquid in the secondary market?
- A dealer quotes a bond at 98.40 bid and 98.70 ask per 100 par. An investor buys EUR 5 million par and immediately sells it back to the same …