CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 83 Discussion

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

Question #: 83
Topic #: 1

[All CIMAPRA19-F02-1 Questions]

Which TWO of the following statements about bonds and their issue are true?

ACredit rating agencies assign risk categories to bond issues.

BBonds are a form of loan capital, traded on stock exchanges.

CBonds are a risk-free form of investing because they will always be repaid.

DAll bonds have the same terms and conditions when issued.

EA bond issue is never underwritten because the return is fixed and guaranteed.

Show Suggested Answer

Suggested Answer: A, B, C

by Eun at Mar 16, 2024, 01:56 PM

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Kimi

2 months ago

I'm pretty sure the correct answer is 'All of the above, except C and E, because those are just plain silly.'

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Alecia

1 months ago

So, the correct statements are A and B. Bonds are definitely not always risk-free and underwriting is common in bond issues.

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Jules

1 months ago

I agree, C and E are definitely not true. Bonds are not risk-free and a bond issue can be underwritten.

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Cathern

1 months ago

I think A and B are correct, credit rating agencies do assign risk categories to bond issues and bonds are traded on stock exchanges.

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Caren

2 months ago

I'm going with A and B. The other options are just plain wrong, like someone trying to make a bond question sound more complicated than it is.

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Fannie

18 days ago

It's important to understand the basics of bonds before investing.

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Virgie

20 days ago

Bonds are definitely a form of loan capital, not risk-free like option C suggests.

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Timothy

21 days ago

Yeah, credit rating agencies do assign risk categories to bond issues.

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Buddy

1 months ago

I agree, A and B are the correct statements about bonds.

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Selma

2 months ago

E is a hilarious one. Bonds are always underwritten, otherwise how would they be issued? Clearly, the person who wrote this option has never heard of investment banking.

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Katheryn

2 months ago

C is clearly false. Bonds carry credit risk, and the return is not guaranteed. D is also incorrect, as bond terms can vary.

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Danilo

2 months ago

A and B are definitely true. Bonds are debt instruments and rating agencies do assess the risk associated with them.

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Winfred

2 months ago

I think statement A is true because credit rating agencies help investors assess the risk of bond issues.

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Omer

3 months ago

B) Bonds are a form of loan capital, traded on stock exchanges.

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Winfred

3 months ago

A) Credit rating agencies assign risk categories to bond issues.

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