Please Indicate true or false 14. Index-linked GICs may produce a loss for inves
ID: 1130457 • Letter: P
Question
Please Indicate true or false
14. Index-linked GICs may produce a loss for investors if their underlying market return is negative. 15. The junior tranche of an ABS is paid before the senior tranche. 16. In most cases, investors can redeem index-linked GICs prior to the maturity date. 17. In most cases, PPNs can be liquidated on a weekly basis. 18. Mutual fund linked notes are mutual funds that hold a variety of PPNs. 19. MBS are fully macketable and can be sold at markct valuc at any time 20. Income from COPrS is considered to be interest not dividends. 21. When a private equity company buys debt securities that trade above par, it is buying distressed debt. 22. Tur d financing is investing in underperforming companies that are in financial need. 23. Because of the wide variety of products, ETFs are suitable for all investors E. Sample Multiple Choice Questions 1, What does infrastructure investing involve? Financing well established firms that need to build new factories in order to expand. Buying the assets of a firm and creating an income trust. Providing financing to expand the customer base of a fast-growing company. Financing the construction or improvement of transportation assets. a) b) c) d) 2. Which of the following statements describes early stage private equity investing? a) Well established firms that not profitable enough to be self-sufficient. Firms that are in the beginning stage of developing products or services in high-growch industries. b) c) Firms that are on the teetering on the brink of bankruptcy d) An established retail firm that wishes to expand into new territoryExplanation / Answer
answering ony the first one as these are separate independent questions.
14) True -> if the underlying return is negative, then the index linked GIC will not pay any interest. Thus, there would be no profit, no loss for the investors. However, the market value of these instruments might go down leading to a capital loss.