Reference no: EM132869364

Problem 1: Which of the following is a reason bond markets may lack price transparency.

A.Bond markets sometimes lack a centralized exchange or trading system.

B.All of these answers.

C.In the US, Europe and Japan, bonds are traded in dealer-based over-the-counter markets.

D.There are a large number of debt issues outstanding.

Problem 2: Which of the following statements about zero coupon bonds is NOT true?

A.U.S. Treasury bills and saving bonds are example of zero coupon bonds.

B.When a bond is "stripped," it is split into two parts; the principal and the coupons, or "residue."

C.Zero coupon bonds are particularly popular with pension and insurance companies.

D.The impact of interest rate fluctuations on zero coupon bonds is higher than for coupon bonds.