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    PMS EXAM CHP 3

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    Rachaita Adhikary
    The document discusses different types of fixed income securities such as government securities, public sector bonds, and private sector bonds. It also discusses key features of bonds like issuers under different categories, coupon payments, principal value, maturity date, and optional features like callable, putable, and convertible bonds. The document provides details on intrinsic bond features and different terms used in fixed income markets.

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    PMS EXAM CHP 3

    Uploaded by

    Rachaita Adhikary
    18 views3 pages
    The document discusses different types of fixed income securities such as government securities, public sector bonds, and private sector bonds. It also discusses key features of bonds like issuers under different categories, coupon payments, principal value, maturity date, and optional features like callable, putable, and convertible bonds. The document provides details on intrinsic bond features and different terms used in fixed income markets.

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    PMS EXAM chp 3

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    The document discusses different types of fixed income securities such as government securities, public sector bonds, and private sector bonds. It also discusses key features of bonds like issuers under different categories, coupon payments, principal value, maturity date, and optional features like callable, putable, and convertible bonds. The document provides details on intrinsic bond features and different terms used in fixed income markets.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    18 views3 pages

    PMS EXAM CHP 3

    Uploaded by

    Rachaita Adhikary
    The document discusses different types of fixed income securities such as government securities, public sector bonds, and private sector bonds. It also discusses key features of bonds like issuers under different categories, coupon payments, principal value, maturity date, and optional features like callable, putable, and convertible bonds. The document provides details on intrinsic bond features and different terms used in fixed income markets.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    PMS EXAM

    CHAPTER – 4
    1. What are the different types of Fixed Income Securities?
    Since bonds create fixed financial obligations on the issuers, they are
    referred as fixed income securities. The types are:
     Government securities
     Public sector bonds
     Private sector bonds

    2. i) Government securities or G-Secs, constitute the largest segment of the


    Indian fixed income market.
    ii) The Indian primary market in corporate debt is basically a private
    placement market with most of the corporate bond issues being
    privately placed among the wholesale investors i.e. the banks, financial
    institutions, mutual funds, large corporate & other large investors.

    3. What is the various issuer under Government securities?


    a) Central Government and State Governments
    b) Government Agencies / Statutory Bodies
    c) Public Sector Undertakings
    d) All of the above

    4. What is the various issuer under public sector bank?


    a) Central Government and State Governments
    b) Government Agencies / Statutory Bodies
    c) Public Sector Undertakings
    d) Both b and c

    5. What is the various issuer under Private sector bank?


    a) Government Agencies / Statutory Bodies
    b) Public Sector Undertakings
    c) Corporates and Banks
    d) Financial Institutions
    e) Both c and d
    6. The issuer of a bond agrees to- 1) pay a fixed amount of interest (known
    as______) periodically and 2) repay the fixed amount of principal (known
    as ________) at the date of maturity. Fill in the blanks?
    a) Face value, coupon
    b) Coupon, face value
    c) Coupon, interest rate

    7. The coupon, maturity period and principal value are important intrinsic
    features of a bond.

    8. i) The term to maturity is the time period before a bond matures (or
    expires).
    ii) All G-Secs are normally coupon (interest rate) bearing and have semi-
    annual coupon or interest payment with a tenor of between 5 to 30 years.
    iii) Maturity period is also known as tenor or tenure.
    iv) Principal value of the bond is different from bond’s market price,
    except when the coupon rate of the bond and the prevailing market rate of
    interest is exactly the same.
    v) . If the market interest rate is above the coupon rate, the bond will sell
    at a discount to the par value. If the market rate is below the bond’s coupon,
    the bond will sell at a premium to the par value.

    9. i) Bonds can also be issued with embedded options. Some common types
    of bonds with embedded options are: bonds with call option, bonds with
    put option and convertible bonds.
    ii) A callable bond gives the issuer right to redeem all or part of the
    outstanding bonds before the specified maturity date. The details about
    the call provision would be mentioned in the contract.
    iii) A putable bond gives the bondholders right to sell the bond back to
    the issuer at a pre- determined price on specified dates.
    iv) A convertible bond gives the bondholder the right to exchange the
    bond for a specified number of common shares of the issuing company.
    10.Which is the correct statement regR

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