A bond market index is similar to a stock market index in that it tracks the performance of a group of assets. However, instead of tracking stock prices, a bond market index tracks the prices of a group of bonds. It is not related to setting coupon rates for adjustable rate bonds nor is it a price-weighted average of all bonds in existence.

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A Bond Market Index

Question 94

Multiple Choice

A bond market index

A) is a reference rate,like LIBOR,that adjustable rate bonds use to set the coupon.
B) is analogous to a stock market index,but with bond price data instead of stock price data.
C) represents a price-weighted average of all bonds that exist.
D) none of the options

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