Question at position 33 A 12-year bond was issued 4 years ago. Its tenor is equal to:A 12-year bond was issued 4 years ago. Its tenor is equal to:12 years 8 years4 years

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BlackTom AI · Accepted Answer

Start by restating the scenario to set the context: a bond with a 12-year maturity was issued 4 years ago, and we are asked to identify its tenor (remaining time to maturity).
Option 1: 12 years. This would imply the bond still has a full 12-year life from now, which would mean it was issued just now or that the tenor resets, neither of which aligns with the given fact that it was issued 4 years ago. Therefore, 12 years is not consistent with the remaining time to maturity.
Option 2: 8 years. Since the bond was issued 4 years ago on a 12-year term, the remaining time to maturity is simply 12 − 4 = 8 years. This matches the definition of tenor as the time left until maturity, so this option is consistent with the information provided.
Option 3: 4 years. This would imply that only 4 years remain, which would correspond to a bond issued 8 years ago if the total tenor were 12 years, or to a shorter original issuance, but neither circumstance matches the given data (issued 4 years ago with a 12-year total term). Thus, 4 years does not reflect the remaining time to maturity.
From the above, the key idea is to subtract the time already elapsed since issuance (4 years) from the original tenor (12 years) to obtain the remaining tenor (8 years). The first and third options misinterpret the time remaining by either not accounting for elapsed time or by assuming an incorrect original term, while the second option correctly applies the arithmetic and definition of tenor. It’s essential to distinguish between the original term and the remaining term to avoid confusion about maturity timelines.

Question at position 33 A 12-year bond was issued 4 years ago. Its tenor is equal to:A 12-year bond was issued 4 years ago. Its tenor is equal to:12 years 8 years4 years

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