Described as secured obligations of national government

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Reference no: EM131883762

Consider these statements:

1. Statement 1: Sovereign bonds are best described as secured obligations of a national government.

Statement 2: Over time (over several coupon periods), the full price of a bond will move in a sawtooth fashion, while the flat price of the bond will move much more smoothly.

Both statements are correct.

Both statements are not correct.

Only statement 1 is correct.

Only statement 2 is correct.

2. Statement 1: The legal contract that describes the form of a bond, the obligations of the issuer, and the rights of the bondholders is the bond's indenture.

Statement 2: The tenor of a bond is equal to its duration.

Both statements are correct.

Both statements are not correct.

Only statement 1 is correct.

Only statement 2 is correct.

Reference no: EM131883762

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