Question

QUESTION 18 Match the different types of fixed income securities - Commercial Paper - TIPS A Short-term collateralized lending where the borrower offers financial securities as collateral and agrees to buy those securities back at a slightly greater value than the amount borrowed in (typically a few days. 3. Loans from one financial institution to another using money that is on deposit at a Federal Reserve Bank. - Repo or Repurchase Agreement • Bankers Acceptance - Revenue Bond . General Obligation Bond • • Agency Security Federal Funds CA security issued by a municipality where payments come from a particular project like a toll road. D. A form of financing that is typical in international trade which helps insulate buyers and sellers from counter-party risk (l.e. failure to deliver, failure to pay or delivery of inferior goods.) E. issued by the Federal Government and protected from inflation F. Short-term debt issued by high credit quality corporations. G. A bond issued by a Federal agency like Fannie Mae or Freddie Mac MA security issued by a municipality where payments come from the whole pool of tax revenues and fees collected by the municipality

Answer 1

Commercial paper : Is a unsecured short term debt.

Short term debt issued by high credit quality corporations.

So it matches with F.

Tips : treasury inflation protected securities.

So,it matches with E, issues by federal government and protected from inflation.

Repurchase agreement : short term collateralized lending where the borrower offers financial securities as collateral and agrees to buy back these securities at a slightly higher price after a short period of time.

So, it matches with A.

Bankers acceptance is used typically used in international trade and helps insulate both the buyer and seller from counter party risk.

So, it matches with option D.

Revenue bonds are a security where payments come from a particular project like a toll road.

So, it matches with option C.

General obligation bonds : a security where revenues comes from a whole stream of tax revenues and fees collected by the municipality.

So,it matches with option H.

Agency securities : a bind issued by federal agency like Ginnie mac and Freddie Mac.

So it matches with option G.

Federal funds : loans from one financial institution to another using funds from the federal reserve.

So it matches with option B.