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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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Ciara
23 days ago
I agree with Glory, because interest rates are usually annualized and bonds can have floating coupons.
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Glory
27 days ago
I think the correct answer is B) I and II.
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Millie
28 days 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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Socorro
1 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
3 days ago
I believe it's D) II, III, and IV.
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Arthur
9 days ago
I'm not sure, I think it might be C) I, II, and III.
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Sue
13 days ago
I agree, I think the correct answer is B) I and II.
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