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Free CFA Fixed Income Practice Questions & Answers

900 exam-style Fixed Income questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.

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Question 571

A bond with a face value of $5,000 and a 4% semi-annual coupon has accrued 45 days of interest in a 180-day coupon period. What is the accrued interest?

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Question 572

Which of the following best describes a 'perpetual bond' (consol)?

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Question 573

A Yankee bond is issued in the United States by:

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Question 574

Which of the following best describes a 'Brady bond'?

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Question 575

An issuer wants to raise funds but retain flexibility to retire the debt if interest rates fall. The most appropriate bond structure would be:

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Question 576

A bond that has its principal repayment linked to an inflation index is called:

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Question 577

When a bond is trading 'ex-dividend,' it means:

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Question 578

A bond's coupon rate is set at the time of:

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Question 579

The term 'yield pickup' refers to when an investor:

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Question 580

Which of the following most accurately describes why high-yield bonds typically pay higher coupons than investment-grade bonds?

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Question 581

A bond's original maturity is 30 years and it was issued 25 years ago. Its remaining maturity is:

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Question 582

Which of the following is the most likely reason an issuer would include a call provision in a bond?

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Question 583

An investor comparing two bonds: Bond X has a 6% coupon and no embedded options; Bond Y has a 6% coupon and is callable. Which bond has a higher yield?

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Question 584

Which of the following most accurately describes a 'Samurai bond'?

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Question 585

A bond's price and its required yield move in opposite directions because:

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Question 586

The yield to maturity (YTM) of a bond is best described as:

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Question 587

When a bond is priced at a premium above par, it means:

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Question 588

Matrix pricing is used primarily to:

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Question 589

As a bond approaches its maturity date, its price will converge toward:

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Question 590

A bond's current yield is calculated as:

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Question 591

The 'coupon effect' on bond duration states that:

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Question 592

The 'maturity effect' on bond duration states that, all else equal:

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Question 593

The Z-spread of a bond is best described as:

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Question 594

For an option-free bond, the OAS equals the Z-spread because:

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Question 595

A flat yield curve implies that:

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Question 596

An inverted (downward-sloping) yield curve most often signals:

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Question 597

Spot rates (zero-coupon rates) are preferred for bond pricing because:

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Question 598

Bootstrapping in the context of bond pricing refers to:

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Question 599

An upward-sloping (normal) yield curve is typically consistent with the expectation that:

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Question 600

The pure expectations theory of the yield curve implies that:

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Free CFA Fixed Income Practice Questions & Answers

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