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. Indentures; mortgage bond; debenture; subordinated debenture
i. Development bond; municipal bond insurance; junk bond; investment-gradebond
j. Real risk-free rate of interest, r*; nominal risk-free rate of interest, TRF
k. Inflation premium (IP); default risk premium (DRP); liquidity; liquiditypremium (LP)
1. Interest rate risk; maturity risk premium (MRP); reinvestment rate risk
m. Term structure of interest rates; yield curve
n. "Normal" yield curve; inverted ("abnormal") yield curve
Step by Step Answer:
Financial management theory and practice
ISBN: 978-1439078099
13th edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt