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Please match the following terms to the correct definition. Bond = Coupon = par value = coupon rate = Maturity = Required Rate of Return

Please match the following terms to the correct definition.

Bond =

Coupon =

par value =

coupon rate =

Maturity =

Required Rate of Return (aka discount rate)=

Current Yield =

zero coupon bond =

Real rates =

Nominal Rates =

Term Structure of Interest Rates =

Inflation premium =

Interest rate Risk Premium =

Common Stock =

Dividends =

Preferred Stock =

1.

The relationship between short and long term interest rates.

2.

The debt instrument that is sold by corporations or government to the general public to borrow on a long term basis.

3.

The rate used to calculate the expected values of cash flows.

4.

Interest rates or rates of return that have been adjusted for inflation

5.

The compensation investors demand for the risk of a longer term investment and the greater risk of loss.

6.

Interest rates or rates of return that have not been adjusted for inflation.

7.

The principal or face value of a bond that is repaid at maturity

8.

A bond's coupon payment divided by its closing price

9.

A bond that makes no coupon payments, and is initially priced at a deep discount.

10.

Stock with dividend priority over common stock, normally with a fixed dividend rate, sometimes without voting rights

11.

Equity without priority for dividends or in bankruptcy

12.

The portion of a nominal rate of interest the compensates for expected future inflation,

13.

the annual coupon amount divided by the face value of a bond

14.

Specified date on which the principal amount of a bond is paid.

15.

Payments by a corporation to shareholders, made in either cash or stock.

16.

The stated interest payment made on a bond

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