AIWMI Exam CCRA-L2 Topic 5 Question 107 Discussion

Actual exam question for AIWMI's CCRA-L2 exam

Question #: 107
Topic #: 5

The following information pertains to bonds:

Further following information is available about a particular bond 'Bond F'

There is a 10.25% risky bond with a maturity of 2.25% year(s) its current price is INR105.31, which ccorresponds to YTM of 9.22%. The following are the benchmark YTMs.

Assume that the general market rates have increased. An issuer, Revolution Ltd has plans to roll over its existing commercial paper and forth coming reset dates for its floating rate bonds are very near. Which of the following ratios for revolution will get impacted?

AInterest Coverage and Return on assets

BDSCR, and Return on Assets

CDSCR, Interest Coverage and Return on assets

DDSCR and interest Coverage

Show Suggested Answer

Suggested Answer: B

by Della at Feb 11, 2025, 05:30 PM

Limited Time Offer

25%

Off

Get Premium CCRA-L2 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Howard

12 days ago

I wonder if they'll let me answer this question in interpretive dance. I bet I could really capture the essence of bonds and financial ratios that way.

upvoted 0 times

...

Tonette

13 days ago

Bonds, bonds, bonds... sometimes I feel like they're the only thing we ever talk about in these exams. But hey, I guess they're important, right? Let's see what we can do here.

upvoted 0 times

...

Buddy

14 days ago

Wow, this is a juicy question! Floating rate bonds, commercial paper, and financial ratios all in one? Bring it on, I'm ready to crunch some numbers and show off my finance chops.

upvoted 0 times

...

Claudio

17 days ago

Ah, good old bonds. I remember when I used to collect them as a kid. Simpler times, huh? Anyway, let's see... DSCR, interest coverage, and return on assets, you say? Sounds like I'll need to brush up on my financial ratio knowledge for this one.

upvoted 0 times

...

Scarlet

20 days ago

Hmm, this is a tricky one. The bond information seems straightforward, but the part about the impact on Revolution Ltd's ratios is a bit more complex. I'm going to have to think this through carefully.

upvoted 0 times

...

Ronnie

2 months ago

I'm not sure, but I think D) DSCR and Interest Coverage could also be impacted due to the increase in market rates.

upvoted 0 times

...

Timothy

2 months ago

I agree with Gail, because if market rates have increased, it will impact the Debt Service Coverage Ratio (DSCR), Interest Coverage, and Return on Assets.

upvoted 0 times

...

Gail

2 months ago

I think the correct answer is C) DSCR, Interest Coverage and Return on assets.

upvoted 0 times

...