What Is the Name of the Debt Instruments with a High

question 10

Multiple Choice

What is the name of the debt instruments with a high coupon in earlier payment periods and a lower coupon in later payment periods?

• A)step-down coupon notes
• B)callable step-up notes
• C)inverse floaters
• D)structured notes

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Definitions:

Yield To Call

The rate of return anticipated on a bond if it is held until the call date, considering both the interest payments received and the capital gain or loss upon redemption.

Call Price

The price at which a callable bond or preferred stock can be repurchased by the issuer before its maturity date.

Coupon Bond

A type of bond that offers interest payments through periodic coupon payments to the bondholder and returns the principal at maturity.

Yields To Maturity

The total return anticipated on a bond if held until its maturity date, expressed as an annual rate.