Question #1 of A credit investor has been conducting extensive research on incorporating ESG considerations into his security selection in the technology sector The investor has created a custom benchmark consisting of corporate technology bonds and his goal is to outperform the benchmark Which credit investment strategy is most appropriate for the credit investor to follow? A) Top-down approach B) Bottom-up approach C) Multi-factor approach that focuses on predicting economic cycles Question #2 of There are potential benefits for a corporate bond portfolio manager to include CDOs in their portfolio except: A) relative value opportunities B) diversification C) leverage opportunities Question #3 of Laura Timura is the chief risk manager for Quanta Financial, a U.K based consulting firm that specializes in risk management strategies for fixed income investors A large endowment recently received a significant holding in a publicly traded gold mining stock and has hired Quanta to help them hedge this position until they can sell the shares in years Quanta has recommended a hedging strategy to minimize tail risk that most likely includes: A) selling put options on gold futures contracts B) buying credit spread options on the bonds of gold miners they find least attractively valued C) purchasing calls on gold futures Question #4 of Global portfolio managers can often hedge emerging market currency risk by all of the following, except: A) selling currency futures B) swapping the foreign currency for domestic currency of the investor C) selling currency forwards Question #5 of Sunil Ranieel is an investment-grade fixed income investment strategist for a large pension fund based in the UK Ranieel was at a recent luncheon and was describing his investment process to some local college students at his lunch table Ranieel's investment process will primarily be focused on: A) debt covenants B) collateral valuation C) interest rates Question #6 of Derek Main is a recent college graduate and has been hired as a full-time junior analyst for Falcon Financial, a firm that specializes in providing fixed income investment advice to local pensions Main has been assigned to analyze a newly issued putable bond Main calculates various credit spread measures to begin his analysis The calculated spread measures are as follows: G – Spread 322 I – Spread 325 Z – Spread 334 Main notices that he forgot to calculate an OAS measure, would the OAS be similar to, lower than, or higher than the Z spread measure: A) OAS would be similar to the Z spread B) OAS would be higher than the Z Spread C) OAS would be lower than the Z spread Question #7 of Bid-ask spreads have historically been used to assess liquidity in fixed income markets However, this indicator has proven to be less reliable primarily because: A) of reduced spread sensitivity to fund outflows B) of increased assets under management in Fixed-Income ETFs C) bond dealers and brokers generally hold much less inventory than in the past because of regulatory and capital constraints Question #8 of A bond portfolio manager using the bottom-up approach to security selection would most likely begin their analysis by focusing on: A) bonds that have comparable credit risk B) average credit spreads C) macro factors that drive interest rates Question #9 of As a result of the continued global low interest since the financial crisis of 2008, investors have been investing in larger amounts of emerging market corporate bonds to find increased yields However, investing in emerging market corporate bonds is very different than investing in developed market corporate bonds The following statement correctly identifies these general differences: A) Emerging market bonds have an increased concentration in commodities and banking compared to developed market bonds B) Developed market bonds tend to have lower average credit quality compared to emerging market bonds C) Since the most recent financial crisis, the developed bond market is overcontrated in government issued bonds as compared to emerging market capital markets as investors flee to safer bonds ... putable bond Main calculates various credit spread measures to begin his analysis The calculated spread measures are as follows: G – Spread 322 I – Spread 325 Z – Spread 334 Main notices that... would most likely begin their analysis by focusing on: A) bonds that have comparable credit risk B) average credit spreads C) macro factors that drive interest rates Question #9 of As a result...B) buying credit spread options on the bonds of gold miners they find least attractively valued C) purchasing