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Zero coupon bonds are generally discount bonds premium bonds riskless, because there are no coupon payments either discount or premium bonds, depending on whether rates
Zero coupon bonds are generally
discount bonds | ||
premium bonds | ||
riskless, because there are no coupon payments | ||
either discount or premium bonds, depending on whether rates have went up or down |
As interest rates increase, bond prices
do not change, because the prices are offsetting the rate increases | ||
increase | ||
do not change, because they are fixed by contract | ||
decrease |
The semi-annual interest payments that corporate bonds in the U.S. typically pay are conventionally referred to as
coupon payments | ||
dividends | ||
call payments | ||
yield payments | ||
premium payments |
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