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AIWMI CCRA-L2 Exam - Topic 7 Question 33 Discussion

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 corresponds to YTM of 9.22%. The following are the benchmark YTMs.Assuming the G-Sec has not changed from the time January 2013 to April 2013, what can you predict about the changes bond price and change in issues borrowing rates:
D) Increase and Decrease
A) Decrease and Increase
B) Increase and Increase
C) Decrease and Decrease

AIWMI CCRA-L2 Exam - Topic 7 Question 33 Discussion

Actual exam question for AIWMI's CCRA-L2 exam
Question #: 33
Topic #: 7
[All CCRA-L2 Questions]

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 corresponds to YTM of 9.22%. The following are the benchmark YTMs.

Assuming the G-Sec has not changed from the time January 2013 to April 2013, what can you predict about the changes bond price and change in issues borrowing rates:

Show Suggested Answer Hide Answer
Suggested Answer: D

by Vi at May 07, 2022, 09:07 PM

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Curtis
11 months ago
This is confusing, are we sure about the trends?
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Mickie
11 months ago
Wait, how can prices increase if borrowing rates go up?
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Deane
11 months ago
Totally agree, option A makes sense!
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Myong
11 months ago
I think prices will decrease if rates go up.
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Rutha
11 months ago
Bond F has a YTM of 9.22%.
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Ressie
12 months ago
Hmm, I'm not sure about this one. I'm debating between A and B, but I'm a little confused on the difference between opportunity products with monthly schedules and formula fields. I'll have to think this through carefully.
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Goldie
12 months ago
Hmm, I'm torn between A and B. Response time matters, but actual communication quality seems more important.
upvoted 0 times
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Derrick
12 months ago
Hmm, not sure about this one. Asset depreciation can get a bit tricky. I'll need to think through the options carefully.
upvoted 0 times
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