Bond Contract flashcards

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What is a bond? A bond is a security sold by either a corporation or a government to raise money in exchange for a promised future payment
______ is the annual amount of interest paid expressed as a percentage of the bond's per value Coupon Rate
The price that the bond sells for in the bond market is the _____ Bond price
what is a corporate bond? A corporate bond is a promise to repay a specific amount of money with interest
The amount of money that the bond holder receives at the bond's maturity is called Face value
When do corporations sell bonds? When they need money for major purchases. When they need to finance ongoing business activities. When they cant sell stock. When they need to lower taxes by tax-deductibles
what is the difference between stocks and bonds? A corporate bond is a debt financing which has to be repaid, while a stock is a form of equity financing that does not have to be repaid
What is a debenture? It is a bond backed up by the reputation of the issuing corporation
what is a mortgage bond? A mortgage bond is a corporate bond secures by various assets of the issuing firm
Who can issue bonds? The federal government and it's agencies, the Municipal Government and Corporations
The date that the issuer redeems the bond by paying the principle is called the _____ date The Maturity Date
Short term bonds are generally less risky that long term bonds and so they feature ____ interest rates Lower interest rates
The _______ rate is the interest the issuer agrees to pay each year The coupon rate
What are bonds with no coupons called? Zero Coupon Bonds

What is a bond?

______ is the annual amount of interest paid expressed as a percentage of the bond's per value

The price that the bond sells for in the bond market is the _____

what is a corporate bond?

The amount of money that the bond holder receives at the bond's maturity is called

When do corporations sell bonds?

what is the difference between stocks and bonds?

What is a debenture?

what is a mortgage bond?

Who can issue bonds?

The date that the issuer redeems the bond by paying the principle is called the _____ date

Short term bonds are generally less risky that long term bonds and so they feature ____ interest rates

The _______ rate is the interest the issuer agrees to pay each year

What are bonds with no coupons called?

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