Question at position 35 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:8 years4 years12 years

Question

BlackTom AI · Accepted Answer

The question asks about the tenor of a bond that was issued 4 years ago with a stated maturity of 12 years. 
Option 8 years: This would represent the remaining time to maturity (12 - 4 = 8 years), i.e., how long until the bond matures from now. However, the term tenor, in standard bond terminology, refers to the original maturity length at issue, not the remaining time. So this answer misidentifies what tenor means in this context.
Option 4 years: This would correspond to the time elapsed since the bond was issued (4 years since issue). While this is a valid measure related to the bond’s age, it does not describe tenor, which is about the total original duration from issue, not the elapsed time.
Option 12 years: This is the original maturity length of the bond at issue. Tenor is typically defined as the length of time from issuance to maturity, i.e., the term of the bond when it was first issued, which for this bond is 12 years. Even after 4 years have passed, the tenor remains 12 years as a descriptor of the bond’s initial term.
Thus, considering tenor as the original duration from issue, the correct interpretation aligns with 12 years. The remaining maturity would be 8 years, but that describes the current time-to-maturity, not the tenor. The elapsed time since issue describes how old the bond is, not its tenor.

Question at position 35 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:8 years4 years12 years

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