Question at position 38 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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BlackTom AI · Accepted Answer

Start by identifying what is meant by the tenor of a bond in this context: it refers to the remaining time until maturity, not the total term at issue. Here, the bond was issued 4 years ago and originally had a 12-year tenor, so the total planned lifespan is 12 years from issuance. To find the remaining tenor, subtract the elapsed time since issuance from the original total tenor: 12 years − 4 years = 8 years.

Option 1: 8 years. This aligns with the calculation of remaining maturity, reflecting the time left until the bond matures. It correctly represents the tenor remaining after 4 years have passed.

Option 2: 4 years. This would imply that only 4 years have passed since issuance in total, which contradicts the given data that 4 years have already elapsed and the bond originally lasted 12 years. It confuses elapsed time with remaining maturity.

Option 3: 12 years. This would be the original tenor at issue, not the remaining time after 4 years have elapsed. It ignores the fact that part of the term has already expired and thus overstates the time left.

In summary, the remaining time until maturity is the original tenor minus the time elapsed since issue, yielding 8 years. Each incorrect option represents a common mix-up between total term, elapsed time, and remaining maturity.

Question at position 38 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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