A sovereign bond is a bond issued by a national government, such as the
U.S. government. A bond issued by a local government, such as the State
of Minnesota, is a non-sovereign bond. A bond issued by the IMF is a
supranational bond.
Fixed Income MCQ - Fixed Income Section 1
Credit risk is the risk of loss resulting from the issuer failing to make full
and timely payments of interest and/or repayments of principal.
The primary difference between a money market security and a capital
market security is the maturity at issuance. Money market securities
mature in one year or less, whereas capital market securities mature in
more than one year.
If a bond’s price is higher than its par value, the bond is trading at a
premium.
The annual coupon payment is 10% * 1, 000 = $100. The coupon
payments are paid semi − annually, so50 is paid twice a year.
