Question: What all are the possible embedded options in debt instruments?
Answer: Below are the Embedded options in a debt instrument - Call provisions - Refunding provisions - Prepayment provisions - Optional accelerated provision - Put provision - Conversion provision.
Question: What all are the returns received, when investor invest in fixed income security?
Answer: When investor invest money in the Fixed Income security following are the possible returns from that - Market value when security is sold (If it is higher then buy price the obviously good for investor, selling at low price does not mean loss). - The cash-flows received from the bond until it is held.
Question: What do you mean by risk in Fixed Income market?
Answer: There are several factors which can affect the return, when money invested in bond. And this factor is known as risk, if they affect the negatively on the return.
Question: What all are the possible risks, when money invested in fixed income?
Answer: Following are the risks associated with the Fixed Income security - Inflation, or purchasing-power, risk - Liquidity risk - Exchange-rate, or currency, risk - Volatility risk - Interest-rate risk - Reinvestment risk - Call or prepayment risk - Credit risk - Political or legal risk - Event risk - Sector risk