8/24/2020 Practice Quiz M4 (Ungraded)

My courses ▶ (20/07) MScFE 560 Financial Markets (C20-S3)

▶ Module 4: Fixed Income and Bond Markets ▶ Practice Quiz M4 (Ungraded)

Started on Monday, 24 August 2020, 11:09 PM

State Finished
Completed on Monday, 24 August 2020, 11:12 PM
Time taken 2 mins 54 secs

Question 1
Complete

Not graded

Why is credit risk considered asymmetric? 

Select one:
Only the borrower has all the information about their actual
creditworthiness.
Both parties face equal but opposite risks.
Only the borrower risks being unable to meet their obligations.

Only the lender is exposed to losses resulting from default.

Your answer is incorrect.

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8/24/2020 Practice Quiz M4 (Ungraded)

Question 2

Complete

Not graded

Consider the following statements:

Statement A: Changing prices in primary bond trades gives rise to

interest rate risk.
Statement B: A difference between a government bond price and a
corporate bond price is created when the corporate entity defaults.

Which of the statements given above is correct?

Select one:
Neither statement A nor B
Both statement A and B

Only statement A
Only statement B

Your answer is incorrect.

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8/24/2020 Practice Quiz M4 (Ungraded)

Question 3

Complete

Not graded

Consider the following statements:

Statement A: If there are no perceived changes to an entity’s default risk,

its bond prices can still change suddenly.
Statement B: Tax is a factor that causes xed future payments to be risky.

Which of the statements given above is correct?

Select one:
Only statement A
Both statement A and B
Neither statement A nor B
Only statement B

Your answer is correct.

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8/24/2020 Practice Quiz M4 (Ungraded)

Question 4

Complete

Not graded

Consider the following statements:

Statement A: If the default risk of an entity is perceived to change, all

defaultable bond prices in the market will change.
Statement B: The difference between a government bond price and a
corporate bond price is likely due to default risk.

Which of the statements given above is correct?

Select one:
Neither statement A nor B
Only statement A

Only statement B
Both statement A and B

Your answer is incorrect.

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8/24/2020 Practice Quiz M4 (Ungraded)

Question 5

Complete

Not graded

Consider the following statements:

Statement A: A bond’s maturity date is, by de nition, more than a year

away from its issuing date.
Statement B: Interest-rate risk is the risk that a bond’s principal changes.

Which of the statements given above is correct?

Select one:
Both statement A and B
Only statement B

Neither statement A nor B

Only statement A

Your answer is incorrect.

◄ Notes 4 M4
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Live Session M4 ►

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