SUMMER SCHOOL GUIDEBOOK MCQ ANSWERS

WHAT IS 'HEDGING'?

  • An investment intended to beat the market.

  • An investment intended to offset environmental issues.

  • An investment intended to offset potential losses or gains that may be occurred by another investment.

  • An investment focused on technology companies.

WHAT IS A CONTIGENT CONVERTIBLE BOND?

  • A bond that can have the date of maturity changed.

  • A bond that cannot be sold to another investor.

  • A bond where coupon payments can be suspended and converted into equity if the issuer hits trouble.

  • A bond used to fund the lottery, it is also known as the chance bond.

WHAT IS A DEBENTURE?

  • A strategy used to decrease the cost of an IPO.

  • A debt instrument that is not backed by any collateral and usually has a term greater than 10 years.

  • An investing strategy used by hedge fund managers.

  • A contractual clause allowing a third party to claim money under the contract.

WHAT IS A 'GREEN BOND'?

  • An income instrument that was issued to specifically raise money for climate and environmental projects.

  • Where an investor buys equity in a company that has a focus on ESG.

  • An income instrument that allows the borrower to write off a % of the loan if they are carbon neutral.

  • An income instrument that allows the lender to increase the interest rate if the borrower is not climate friendly.

WHY MIGHT BANKS PARTICIPATE IN SYNDICATED LENDING?

  • To spread the credit risk.

  • To allow the borrower to network with banking directors.

  • To allow the banks to finance a loan using fintech.

  • To fund charities and project finance.

WHAT DOES IT MEAN IF SHARES ARE TRADING AT A PREMIUM POST IPO?

  • The shares are above the issue price.

  • The shares are only available to those in a specific country.

  • The shares are below the issue price.

  • The shares have an unusually high dividend.