金融英语刘文国第二版课后练习Exercises 10.docxVIP

Exercises?10 Ⅰ?Answer?the?following?questions?in?English: 1.?When?is?bond?said?to?be?selling?at?a?premium?and?when?is?bond?said to?be?selling?at?a?discount? When?a?bond?trades?at?a?price?above?the?face?value,?it?is?said?to be?selling?at?a premium.?When?a?bond?sells?below?face?value,?it?is said?to?be?selling?at?a?discount. 2.?What?is?the?most?important?source?of?risk?for?bonds?in?general? Explain. Interest?rates?are?the?most?important?factor?in?the?pricing?of bonds,?so?interest?rate?will?be?most?important?source?of?risk. 3.?What?is?the?major?advantage?for?municipal?bonds? The?major?advantage?to?municipal?is?that?the?returns?are?free?from federal?tax.?Furthermore,?local?governments?will?sometimes?make?their debt?non-taxable?for?residents,?thus?making?some?municipal?bonds completely?tax?free. 4.?What?is?the?coupon? The?coupon?is?the?amount?the?bondholder?will?receive?as?interest payments.?Its?called?a?coupon?because?sometimes?there?are?physical coupons?on?the?bond?that?you?tear?off?and?redeem?for?interest. 5.?What?are?callable?bonds? A?bond?that?can?be?redeemed?by?the?issuer?prior?to?its?maturity. Usually?a?premium?is?paid?to?the?bond?owner?when?the?bond?is?called. Also?known?as?a?redeemable?bond. 6.?How?to?classify?fixed-income?securities?in?general? In?general,?fixed-income?securities?are?classified?according?to the?length?of?time?before?maturity.?These?are?the?three?main categories: Bills?-?debt?securities?maturing?in?less?than?one?year. Notes?-?debt?securities?maturing?in?one?to?10?years. Bonds?-?debt?securities?maturing?in?more?than?10?years. 7.?What?are?zero-coupon?bonds? This?is?a?type?of?bond?that?makes?no?coupon?payments?but?instead is?issued?at?a?considerable?discount?to?par?value. 8.?What?do?bond?brokers?do?for?investors? Bond brokers support full service for investors, most bond transactions?can?be?completed?through?a?full?service?or?discount brokerage. Ⅱ?Fill?in?the?each?blank?with?an?appropriate?word?or?expression: 1.?Interest?Rate?Risk?is?the?number?one