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ICMA FMFQ Exam - Topic 4 Question 26 Discussion

An EUR-denominated Eurobond matures on 15 January 2017 and pays an annual coupon of 5% on an act/act basis. The bond is trading at a yield to maturity of 6% for settlement on 10 March 2015. Which of the following ststements is true of its clean price?
B) Its price will be below 100
A) Its price will be above 100
C) Its price will be 100
D) Need more information

ICMA FMFQ Exam - Topic 4 Question 26 Discussion

Actual exam question for ICMA's FMFQ exam
Question #: 26
Topic #: 4
[All FMFQ Questions]

An EUR-denominated Eurobond matures on 15 January 2017 and pays an annual coupon of 5% on an act/act basis. The bond is trading at a yield to maturity of 6% for settlement on 10 March 2015. Which of the following ststements is true of its clean price?

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Suggested Answer: B

by Colette at May 05, 2022, 08:43 PM

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Douglass
8 months ago
Wait, why would it be above 100? That seems off.
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Glennis
8 months ago
Agree, it's definitely below 100.
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Frederica
8 months ago
I think it might be above 100, not sure though.
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Kimi
8 months ago
Definitely below 100!
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Celestine
8 months ago
The bond has a higher yield than the coupon rate.
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Portia
8 months ago
I'm not entirely sure, but I feel like the clean price should be above 100 if the coupon rate was higher than the yield.
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Tiffiny
8 months ago
I think I practiced a similar question where the bond was trading at a higher yield, and it also resulted in a price below par.
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Alysa
8 months ago
I remember that when the yield to maturity is higher than the coupon rate, the bond price tends to be below 100.
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Hayley
8 months ago
I wonder if we need more details about the accrued interest to determine the clean price accurately.
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Taryn
9 months ago
Okay, let me think this through. The question is asking us to ensure the name is displayed in all uppercase letters, so I'm leaning towards option A as well. Modifying the name variable directly seems like the simplest solution.
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Ilona
9 months ago
Okay, I think I've got this. Option B looks like the right way to switch the context to the frame with the given ID. I'll double-check the syntax, but I'm feeling confident about this one.
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Lorita
9 months ago
Hmm, let me take a closer look at this kubeconfig file. I think I can figure out the number of clusters and which one uses username/password authentication.
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Kathrine
9 months ago
C) c is versatile, but I am not sure it's complete.
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