ACI
3I0-012 · Question #332
What happens when a coupon is paid on bond collateral during the term of a sell/buy-back?
The correct answer is D. The equivalent value plus reinvestment income is deducted from the repurchase price. See the full explanation below for the reasoning.
Question
What happens when a coupon is paid on bond collateral during the term of a sell/buy-back?
Options
- ANothing
- BA margin call is triggered on the seller
- CA manufactured payment is made to the seller
- DThe equivalent value plus reinvestment income is deducted from the repurchase price
How the community answered
(54 responses)- A11% (6)
- B7% (4)
- C4% (2)
- D78% (42)
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