Term
| "Debt securities" are also known as ________ ? |
|
Definition
| "Fixed-income securities" |
|
|
Term
| Who can issue debt securities? |
|
Definition
| Corporations, municipalities, and the US government. |
|
|
Term
| Why are debt securities also referred to as fixed-income securities? |
|
Definition
| Because of the fixed interest payments that investors (borrowers) receive from issuers. |
|
|
Term
| Bonds are considered ______ securities? |
|
Definition
|
|
Term
| Why might a corporation issue bonds? |
|
Definition
| - Raise capital or funds for capital expenditure (plant construction or equipment) |
|
|
Term
| Corporate bonds with maturities of 5+ years... |
|
Definition
|
|
Term
| How long does it take for a Treasury bill to mature? |
|
Definition
|
|
Term
| How long does it take for a Treasury note to mature? |
|
Definition
|
|
Term
| How long does it take for a Treasury bond to mature? |
|
Definition
|
|
Term
| Municipal securities are... |
|
Definition
| ... the debt obligations of state and local governments and their agencies. |
|
|
Term
| What is the interest rate of a bond called? |
|
Definition
|
|
Term
|
Definition
Is the interest rate that a bond pays.
Is calculated from the bond's par value ($1,000 per bond) |
|
|
Term
| What is the "par value" of a bond? |
|
Definition
|
|
Term
| For bonds, interest accrues _____ and is paid ____________. |
|
Definition
|
|
Term
Decode the bond quote:
5M ABC J&J 15 8s of '09 |
|
Definition
5M - Five $1,000 bonds; total principal amount of $5,000
ABC - Issuer of the bond (this bond is a corporate bond because of its three-letter name)
J&J 15 - Bond pays interest of January 15 and July 15 of each year (note, if # is not listed, assume interest is paid on 1st of the month(s))
8s - ANNUAL interest/coupon rate
'09 - Year the bond matures/investor receives principal |
|
|
Term
|
Definition
| Date maturity is paid to the investor... |
|
|
Term
| 3 types of bond maturity structure? |
|
Definition
1. Term
2. Serial
3. Balloon |
|
|
Term
|
Definition
| Bond issued so that the principal of the whole issue matures at once. |
|
|
