Term
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Definition
| stated interest payment made on a bond |
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Term
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Definition
| The principal amount of a bond that is repaid at the end of the term |
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Term
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Definition
| the annual coupon divided by the fave value of a bond |
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Term
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Definition
| specified date on which the principal amount of a bond is paid |
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Term
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Definition
| rate required in the market on a bond |
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Term
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Definition
| risk that arises for bond owners from fluctuating interest rates |
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Term
| how much interest rate a bond has |
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Definition
| depends on how sensitive its price is to interest rate changes |
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Term
| sensitivity directly depends on two things: |
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Definition
| the time to maturity and the coupon rate |
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Term
| All other things being equal, the longer the time to maturity |
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Definition
| the greater the interest rate risk |
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Term
| All other things being equal, the lower the coupon rate |
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Definition
| the greater the interest rate risk |
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Term
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Definition
| a bond's coupon payment divided by its closing price |
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Term
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Definition
| the written agreement between the corporation and the lender detailing the terms of the debt issue |
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Term
| Bond Indenture required provisions 1: |
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Definition
| the basic terms of the bond |
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Term
| Bond Indenture required provisions 2: |
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Definition
| the total amount of bonds issued |
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Term
| Bond Indenture required provisions 3: |
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Definition
| a description of property used as security |
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Term
| Bond Indenture required provisions 4: |
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Definition
| the repayment arrangements |
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Term
| Bond Indenture required provisions 5: |
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Definition
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Term
| Bond Indenture required provisions 6: |
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Definition
| details of the protective covenants |
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Term
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Definition
| The registrar of a company records who owns each bond, and bond payments are made directly to the owner of record |
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Term
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Definition
| a bond issued without record of the owner's name, payment is made to whomever holds the bond |
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Term
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Definition
| unsecured debt, usually with a maturity of 10 years or more |
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Term
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Definition
| indicated preference in position over other lenders |
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Term
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Definition
| an account managed by the bond trustee for early bond redemption |
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Term
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Definition
| Agreement giving the issuer the option to repurchase a bond at a specific price prior to maturity |
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Term
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Definition
| the amount by which the call price exceeds the par value of the bond |
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Term
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Definition
| bond call provision prohibiting the company form redeeming the bond prior to a certain date |
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Term
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Definition
| bond during period in which it cannot be redeemed by the issuer |
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Term
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Definition
| part of the indenture limiting certain actions that might be taken during term of the loan, usually to protect lender's interest |
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Term
| Two leading bond-rating firms |
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Definition
| Moody's and Standard and Poor's |
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Term
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Definition
| an assessment of the creditworthiness of the corporate issuer |
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Term
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Definition
| how likely the firm is to default and the protection creditors have in the event of a default |
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Term
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Definition
| much lower than the yields on taxable bonds because of the tax breaks |
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Term
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Definition
| bond that makes no coupon payments, and thus is initially priced at a deep discount |
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Term
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Definition
| coupon payments are adjustable, adjustments are tied to an interest rate index |
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Term
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Definition
| holder has the right to redeem the note at par on the coupon payment date after some specified amount of time |
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Term
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Definition
| bonds that are based on stock, bonds, commodities, or currencies |
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Term
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Definition
| can be swapped for a fixed number of shares of stock anytime before maturity at the holder's option |
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Term
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Definition
| allows the holder to force the issuer to buy the bond back at a stated price |
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Term
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Definition
| the price a dealer is willing to pay for a security |
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Term
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Definition
| the price a dealer is willing to take for a security |
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Term
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Definition
| the difference between the bid price and the asked price |
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Term
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Definition
| the price of a bond net of accrued interest, this is the price that is typically quoted |
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Term
| Dirty Price (Full or Invoice price) |
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Definition
| the price a bond including accrued interest, the price the buyer actually pays |
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Term
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Definition
| interest rates or rates of return that have been adjusted for inflation |
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Term
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Definition
| interest rates or rates of return that have not been adjusted for inflation |
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Term
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Definition
| the relationship among nominal returns, real returns, and inflation |
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Term
Term structure of interest rates
(Pure value of money) |
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Definition
| relationship between nominal interest rates on default-free. Pure discount securities and time to maturity |
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Term
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Definition
| they involve no risk of default and a single lump-sum future payment |
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Term
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Definition
| the portion of a nominal interest rate that represents compensation for expected future inflation |
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Term
| Interest rate risk premium |
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Definition
| the compensation investors demand for bearing interest rate risk |
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Term
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Definition
| plot of the yields on Treasury notes and bonds relative to maturity |
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Term
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Definition
| the portion of a nominal interest rate or bond yield that represents compensation for the possibility of default |
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Term
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Definition
| The portion of a nominal interest rate or bond-yield that represents compensation for unfavorable tax status |
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Term
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Definition
| The portion of a nominal interest rate or bond yield that represents compensation for lack of liquidity |
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