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1、763571826ExercisesExercises 1010 Answer the following questions in English: 1. When is bond said to be selling at a premium and when is bond said to be selling at a discount?When a bond trades at a price above the face value, it is said to be selling at a premium. When a bond sells below face value,
2、 it is said to be selling at a discount. 2. What is the most important source of risk for bonds in general? Explain.Interest rates are the most important factor in the pricing of bonds, so interest rate will be most important source of risk. 3. What is the major advantage for municipal bonds? The ma
3、jor advantage to municipal is that the returns are free from federal tax. Furthermore, local governments will sometimes make their debt non-taxable for residents, thus making some municipal bonds completely tax free. 4. What is the coupon?The coupon is the amount the bondholder will receive as inter
4、est payments. Its called a “coupon“ because sometimes there are physical coupons on the bond that you tear off and redeem for interest. 5. What are callable bonds?A bond that can be redeemed by the issuer prior to its maturity. Usually a premium is paid to the bond owner when the bond is called. Als
5、o known as a “redeemable bond“. 6. How to classify fixed-income securities in general?In general, fixed-income securities are classified according to the length of time before maturity. These are the three main categories: Bills - debt securities maturing in less than one year. Notes - debt securiti
6、es maturing in one to 10 years. Bonds - debt securities maturing in more than 10 years. 7. What are zero-coupon bonds?This is a type of bond that makes no coupon payments but instead is issued at a considerable discount to par value. 8. What do bond brokers do for investors? Bond brokers support ful
7、l service for investors, most bond transactions can be completed through a full service or discount brokerage. Fill in the each blank with an appropriate word or expression: 1. Interest Rate Risk is the number one source of risk to fixed-income 763571826investors, because its the major cause of pric
8、e volatility in the bond market. 2. In the case of bonds, interest rate risk translates into market risk: The behavior of interest rate, in general, affects all bonds and cuts across all sectors of the market-even the U.S. Treasury market. 3. When market interest rates rise, bond prices fall, and vi
9、ce versa. And as interest rates become more volatile, so do bond prices. 4. This is a type of bond that makes no coupon payments but instead is issued at a considerable discount to par value. For example, lets say a zero-coupon bond with a $1,000 par value and 10 years to maturity is trading at $600
10、; youd be paying $600 today for a bond that will be worth $1,000 in 10 years. 5. Bonds have a number of characteristics of which you need to be aware. All of these factors play a role in determining the value of a bond and the extent to which it fits in your portfolio. 6. In general, fixed-income se
11、curities are classified according to the length of time before maturity. Translate the following sentences and passage into English: 1. 债券买卖是指交易双方以约定的价格买卖一定金额的债券并在规定的清算时间 内办理债券款交割的交易方式。 Security trading is a trading model that both of seller and buyer sign a contract with the confirmed bond price an
12、d number, during settlement both of seller and buyer make a delivery. 2. 债券回购是指交易双方进行的以债券为权利质押的一种短期资金融通业务。资 金融入方（正回购方）在将债券卖给资金融出方（逆回购方）以融入资金的同 时，双方约定在将来某一日期由正回购方按约定回购利率计算的金额向逆回购 方买回相等数量的同品种债券的交易行为。 Redeem of security is a short term financing business that both of issuer and holder of bond takes bon
13、d as right pledge, when the borrower of fund (positive redeemer) sells bond to lender of fund (negative redeemer) for financing, both of them sign a contract in there positive redeemer will redeem the bond that he issued with redeem interest from negative redeemer before maturity of bond. 3. 所谓可转换公司
14、债券是指由公司发行的，投资者在一定时期内可选择一定条件 转换成公司股票的公司债券，通常称作可转换债券或可转债。这种债券兼具债 权和股权双重属性。 Convertible bond is security issued by firm which investors have option to convert bond into firms stock during holding period, the convertible bond consists of two characters of bond and stock. 4. 证券交易必需受 SEC 及证券交易所自我约束机制的监管。7
15、63571826Security trading must be managed by SEC and self-regulating mechanism of the stock exchange. 5. 场外交易市场不是一个正式的证券交易所，而是由经纪人和交易商组成的一个 非正式的网络，他们通过这一网络协商证券的交易。 The over-the-counter market is not official security exchange market, it is unofficial network grouped by dealers and brokers, dealers an
16、d brokers exchange securities through the network. 6. 一级市场上的发行方式也分为两种，公募和私募。 The issue model of stock in the primary market can be classified into: public offering and private offering. Translate the following sentences and passage into Chinese: 1. The higher rate of return the bond offers, the more risky the investment. There have been instances of companies failing to pay back the bond (default), so, to entice invest
