Define each of the following terms: a. Bond; Government of Canada bond; corporate bond; foreign bond b.

Question:

Define each of the following terms:

a. Bond; Government of Canada bond; corporate bond; foreign bond

b. Par value; maturity date; coupon payment; coupon interest rate

c. Floating-rate bond; zero coupon bond

d. Call provision; retractable bond; sinking fund

e. Convertible bond; warrant; income bond; real return 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. Agency bond; junk bond; investment-grade bond

k. Real risk-free rate of interest, r*; nominal risk-free rate of interest, rRF

I. Inflation premium (IP); default risk premium (DRP); liquidity; liquidity premium (LP)

m. Interest rate risk; maturity risk premium (MRP); reinvestment rate risk

n. Term structure of interest rates; yield curve

o. "Normal" yield curve; inverted ("abnormal") yield curve

Coupon
A 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...

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