CCM Debt Securities Practice Questions - SEC Sri Lanka Certificate in Debt Securities (CCM) Exam - CCM Debt Securities Practice Questions - SEC Sri Lanka Certificate in Debt Securities (CCM) Exam

Question 1

Which of the following primary features distinguishes the money market from the capital market in Sri Lanka?

Money market instruments represent ownership in corporations, whereas capital market instruments represent debt obligations. Money market instruments have a maturity of one year or less, whereas capital market instruments have maturities exceeding one year. Money market transactions are regulated by the Securities and Exchange Commission (SEC), whereas capital markets are regulated by the Central Bank of Sri Lanka (CBSL). Money market instruments carry higher default risk and interest rate risk than capital market instruments.

Correct Answer:

Money market instruments have a maturity of one year or less, whereas capital market instruments have maturities exceeding one year.

Question 2

In the event of a corporate liquidation in Sri Lanka, which of the following describes the priority of claims for fixed income holders?

Fixed income holders have a lower priority of claim than common shareholders. Fixed income holders have equal priority of claim with preferred shareholders. Fixed income holders have a higher priority of claim than equity holders (both preferred and common shareholders). Fixed income holders have their claims satisfied only after all administrative expenses and common equity claims are paid.

Correct Answer:

Fixed income holders have a higher priority of claim than equity holders (both preferred and common shareholders).

Question 3

What is the 'par value' (also known as face value) of a debt security?

The principal amount that the issuer agrees to repay the bondholder at the maturity date. The market price at which the bond is currently trading on the secondary market. The total amount of interest payments that will be paid over the life of the bond. The discount value at which the bond is originally auctioned by the Central Bank.

Correct Answer:

The principal amount that the issuer agrees to repay the bondholder at the maturity date.

Question 4

Which of the following defines the coupon rate of a bond?

The annualized rate of return earned by an investor who buys the bond at its current market price. The nominal annual interest rate paid by the issuer to the bondholder, expressed as a percentage of par value. The yield to maturity adjusted for the prevailing inflation rate in Sri Lanka. The discount rate applied to determine the present value of the bond's maturity value.

Correct Answer:

The nominal annual interest rate paid by the issuer to the bondholder, expressed as a percentage of par value.

Question 5

Which statement accurately describes a zero-coupon bond?

It pays a variable coupon rate tied to the Sri Lanka Interbank Offered Rate (SLIBOR). It pays interest coupon payments only if the issuer generates a profit during the financial year. It is issued at par value and redeemed at a premium at maturity to compensate for the lack of coupons. It is issued at a discount to its par value, makes no periodic coupon payments, and is redeemed at par at maturity.

Correct Answer:

It is issued at a discount to its par value, makes no periodic coupon payments, and is redeemed at par at maturity.

Question 1

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Prepare with the CCM Debt Securities Practice Questions - SEC Sri Lanka Certificate in Debt Securities (CCM) Exam practice quiz. This question bank includes 100 questions covering bond, yield, market, rate, and value. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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CCM Debt Securities Practice Questions - SEC Sri Lanka Certificate in Debt Securities (CCM) Exam

This practice set contains 100 questions from the matching question bank and focuses on bond, yield, market, rate, and value. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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CCM Debt Securities Practice Questions - SEC Sri Lanka Certificate in Debt Securities (CCM) Exam

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