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Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.
Fixed Income
8. Yield and Yield Spread Measures for Floating-Rate Instruments practice questions
8. Yield and Yield Spread Measures for Floating-Rate Instruments is part of CFA Level I Fixed Income. Fixed Income questions focus on bond cash flows, yield measures, duration, convexity, credit risk, securitization, and curve interpretation. Use this page to review the controlling ideas, then work through 7 questions with answer explanations and common traps.
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Fixed Income
8. Yield and Yield Spread Measures for Floating-Rate Instruments
A floating-rate note's quoted margin is 50 bps, but investors now require a discount margin of 90 bps for similar risk. The note is most likely priced:
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8. Yield and Yield Spread Measures for Floating-Rate Instruments
A 180-day Treasury bill with a face value of 1,000,000 is priced at 985,000. Using a 360-day year, the discount-basis yield is closest to:
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8. Yield and Yield Spread Measures for Floating-Rate Instruments
In a floating-rate note, the quoted margin is best described as the spread:
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8. Yield and Yield Spread Measures for Floating-Rate Instruments
Immediately after a reset date, an otherwise plain floating-rate note will trade closest to par when its quoted margin is equal to its:
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8. Yield and Yield Spread Measures for Floating-Rate Instruments
A floating-rate note's quoted margin is 80 bps and the market-required margin has increased to 110 bps. All else equal, the FRN is most likely to trade:
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8. Yield and Yield Spread Measures for Floating-Rate Instruments
A 180-day Treasury bill with face value USD1,000,000 is quoted on a 360-day bank discount basis at 3.60%. The purchase price is closest to:
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8. Yield and Yield Spread Measures for Floating-Rate Instruments
A 90-day money market instrument is purchased for 99.20 per 100 of face value and pays 100 at maturity. On a 365-day add-on basis, the yield is closest to:
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