CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 109 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 109
Topic #: 1

RS has issued an instrument with a nominal value of $1 million, at a discount of 2.5%, and a coupon rate of 6%. The terms of the issue are that the instrument must eitherbe redeemed at par, at the option of the holder, in three years' time, or alternativelyconverted into equity shares in RS.

The characteristics of this instrument taken as a whole indicates that it would be classifed as which of the following?

ACompound instrument

BDebt instrument

CEquity instrument

DDiscounted instrument

Show Suggested Answer

Suggested Answer: A

by Jeannine at Mar 24, 2025, 03:40 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F02-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Valentine

3 days ago

I think the answer is B) Debt instrument. The instrument has a fixed maturity date and a coupon rate, which are characteristics of a debt instrument.

upvoted 0 times

...