Define each of the following terms: a. Bond; Treasury bond; corporate bond; municipal bond; foreign bond b.
Question:
Define each of the following terms:
a. Bond; Treasury bond; corporate bond; municipal bond; foreign bond
b. Par value; maturity date; coupon payment; coupon interest rate
c. Floating-rate bond; zero coupon bond; original issue discount bond (OID)
d. Call provision; redeemable bond; sinking fund
e. Convertible bond; warrant; income bond; indexed, or purchasing power, bond
f. Premium bond; discount bond
g. Current yield (on a bond); yield to maturity (YTM); yield to call (YTC)
h. Reinvestment risk; interest rate risk; default risk
i. Indentures; mortgage bond; debenture; subordinated debenture
j. Development bond; municipal bond insurance; junk bond; investment-grade bond
CouponA coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Step by Step Answer:
Financial management theory and practice
ISBN: 978-0324422696
12th Edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt