Fixed Income

Cash Flows and Types practice questions

Cash Flows and Types 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 2 questions with answer explanations and common traps.

Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.

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What to know

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.

How to practice

Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.

Review signal

Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.

Moderate

Fixed Income

Cash Flows and Types

A bond allows the issuer to redeem the bond before maturity when rates fall, while another bond allows the investor to sell the bond back to the issuer at par after three years. The first and second provisions most likely:

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Moderate

Fixed Income

Cash Flows and Types

A floating-rate note pays three-month reference rate plus 120 bps, resets quarterly, and currently trades at par immediately after reset. If market required margin for this issuer rises to 170 bps before the next reset, the note will most likely trade:

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