Bond Markets Analysis and Strategies 8th Edition by Frank J. Fabozzi Solution manual

 
20. What is meant by marking a position to market?
 
Marking a position to market means that periodically the market value of a portfolio must be determined. Thus, it can refer to the practice of reporting the value of assets on a market rather than book value basis. Marking to market can also refer to settling or reconciling changes in the value of futures contracts on a daily basis.
 
21. What is meant by a CUSIP number, and why is it important?
 
By a CUSIP number, we mean a unique number assigned to a firm’s security to identify it. Thus, its importance lies in its ability to singularly identify each security. Most securities are identified by the characters (letters and numbers) found in its CUSIP number. CUSIP stands for Committee on Uniform Security Identification Procedures. For securities that have nine characters, the first six characters identify the issuer: the corporation, government agency, or municipality. The next two characters identify whether the issue is debt or equity and the issuer of the issue. The last character is simply a check character that allows for accuracy checking and is sometimes truncated or ignored. The CUSIP International Numbering System (CINS) is used to identify foreign securities and includes 12 characters.