What is the motivation for a new-issue swap trade?
What will be an ideal response?
Trades from seasoned issues to new issues, referred to new-issue swap trades, are based on two motives. First, new issues are viewed as having better liquidity than seasoned issues. Evidence confirms that new issues provide better liquidity. The second motive for acquiring new issues are to gain exposure to a new issuer or to a new type of corporate bond structure.
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Dennis Company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired, resulting in a loss of $3,000. The amount to be reported under cash flows from financing activities is:
A) $ (3,000). B) $(60,000). C) $(57,000). D) $(50,000) E) Zero. This is an investing activity.
What type of appraiser is qualified to appraise a commercial development valued at over $500,000?
A. Certified general appraiser B. Master appraiser C. Residential appraiser D. Trainee appraiser