AIWMI Exam CCRA-L2 Topic 2 Question 92 Discussion

Actual exam question for AIWMI's CCRA-L2 exam

Question #: 92
Topic #: 2

[All CCRA-L2 Questions]

Step up upon feature will lead to

Ano change as step is not linked to issuers rating

Bpositive basis because the bond holder is compensated

Cnegative basis given that the bondholder is not compensated

DWill lead to a change only if there is a linkage to the issuer's rating

Show Suggested Answer

Suggested Answer: B

by Stacey at Jul 05, 2024, 06:57 PM

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Doyle

1 years ago

Haha, step-up features - it's like the bond is doing jumping jacks to get your attention!

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Timothy

1 years ago

I agree with Taryn. The question clearly states 'will lead to', so the answer has to be based on whether the step-up is tied to the issuer's rating.

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Mila

1 years ago

D) Will lead to a change only if there is a linkage to the issuer's rating

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Dalene

1 years ago

I think B is the correct answer.

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Adelle

1 years ago

B) positive basis because the bond holder is compensated

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Annmarie

1 years ago

A) no change as step is not linked to issuers rating

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Benedict

1 years ago

I'm not sure, but I think the answer might be D. It would only lead to a change if there is a linkage to the issuer's rating.

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Ronna

1 years ago

I disagree, I believe the answer is C. If bondholders are not compensated, it would be a negative basis.

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Taryn

1 years ago

Option D seems logical. The step-up feature would only impact the bond's basis if it's linked to the issuer's rating.

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Merissa

1 years ago

I agree, if there's no connection to the issuer's rating, then the step-up feature wouldn't really affect the bond's basis.

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Barrett

1 years ago

Option D seems logical. The step-up feature would only impact the bond's basis if it's linked to the issuer's rating.

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Kimberely

1 years ago

I think the answer is B, because bond holders should be compensated for taking on more risk.

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