AIWMI Exam CCRA-L2 Topic 2 Question 92 Discussion

Actual exam question for AIWMI's CCRA-L2 exam

Question #: 92
Topic #: 2

[All CCRA-L2 Questions]

Step up upon feature will lead to

Ano change as step is not linked to issuers rating

Bpositive basis because the bond holder is compensated

Cnegative basis given that the bondholder is not compensated

DWill lead to a change only if there is a linkage to the issuer's rating

Show Suggested Answer

Suggested Answer: B

by Stacey at Jul 05, 2024, 06:57 PM

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Doyle

3 months ago

Haha, step-up features - it's like the bond is doing jumping jacks to get your attention!

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Timothy

4 months ago

I agree with Taryn. The question clearly states 'will lead to', so the answer has to be based on whether the step-up is tied to the issuer's rating.

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Mila

3 months ago

D) Will lead to a change only if there is a linkage to the issuer's rating

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Dalene

3 months ago

I think B is the correct answer.

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Adelle

3 months ago

B) positive basis because the bond holder is compensated

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Annmarie

3 months ago

A) no change as step is not linked to issuers rating

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Benedict

4 months ago

I'm not sure, but I think the answer might be D. It would only lead to a change if there is a linkage to the issuer's rating.

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Ronna

4 months ago

I disagree, I believe the answer is C. If bondholders are not compensated, it would be a negative basis.

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Taryn

4 months ago

Option D seems logical. The step-up feature would only impact the bond's basis if it's linked to the issuer's rating.

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Merissa

4 months ago

I agree, if there's no connection to the issuer's rating, then the step-up feature wouldn't really affect the bond's basis.

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Barrett

4 months ago

Option D seems logical. The step-up feature would only impact the bond's basis if it's linked to the issuer's rating.

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Kimberely

4 months ago

I think the answer is B, because bond holders should be compensated for taking on more risk.

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