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GARP Exam 2016-FRR Topic 1 Question 2 Discussion

Actual exam question for GARP's 2016-FRR exam
Question #: 2
Topic #: 1
[All 2016-FRR Questions]

Which of the following statements regarding bonds is correct?

I . Interest rates on bonds are typically stated on an annualized rate.

II . Bonds can pay floating coupons that are directly linked to various interest rate indices.

III . Convertible bonds have an element of prepayment risk.

IV . Callable bonds have an element of equity risk.

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Suggested Answer: C

by Ernie at May 05, 2025, 02:25 PM

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Matt
30 days ago
Bonds with equity risk? That's like putting a cat in charge of the canary. I'm sticking with B) I and II. Let's keep this bond party simple, folks!
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Jose
1 months ago
Wow, this exam is really testing my bond expertise. I'm going to go with C) I, II, and III. Gotta love those convertible bonds and their prepayment surprises!
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Hobert
2 days ago
User 3: I agree with you, Hobert. I'm also going with C) I, II, and III. Let's hope we're right!
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Kandis
21 days ago
User 2: I'm going with C) I, II, and III. Convertible bonds do have that prepayment risk.
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Gail
22 days ago
User 1: I think I'll go with B) I and II. Floating coupons sound interesting.
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Teddy
1 months ago
I think the correct answer is D) II, III, and IV, because callable bonds have equity risk as well.
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Charlena
1 months ago
Ha! Equity risk in bonds? That's like mixing oil and water. I'm going with B) I and II. Keep it simple, right?
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Isadora
4 days ago
User 3: I'm on the same page, B) I and II for me too.
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India
7 days ago
User 2: Yeah, keeping it simple is the way to go. B) I and II it is.
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Virgilio
9 days ago
User 1: I agree, equity risk in bonds doesn't make sense. I'm also going with B) I and II.
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Aliza
1 months ago
I believe the answer is C) I, II, and III, because convertible bonds also have prepayment risk.
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Ciara
2 months ago
I agree with Glory, because interest rates are usually annualized and bonds can have floating coupons.
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Glory
2 months ago
I think the correct answer is B) I and II.
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Millie
2 months ago
Hmm, this is a tricky one. I'm going with C) I, II, and III. Convertible bonds do have an element of prepayment risk, but I'm not sure about the equity risk for callable bonds. Guess I need to brush up on my bond knowledge!
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Lyndia
1 months ago
I believe it's D) II, III, and IV. Callable bonds do have an element of equity risk, along with convertible bonds having prepayment risk.
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Michel
1 months ago
I'm going with C) I, II, and III. Convertible bonds do have prepayment risk, but I'm not sure about the equity risk for callable bonds.
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Germaine
1 months ago
I think it's B) I and II. Interest rates are typically annualized and bonds can have floating coupons linked to interest rate indices.
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Socorro
3 months ago
I think the correct answer is B) I and II. Bonds typically have an annualized interest rate, and they can have floating coupons linked to various indices. The other statements seem a bit off.
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Virgie
2 months ago
I believe it's D) II, III, and IV.
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Arthur
2 months ago
I'm not sure, I think it might be C) I, II, and III.
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Sue
2 months ago
I agree, I think the correct answer is B) I and II.
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