Bonds Flashcards
1
Q
Conversion Ratio
A
1,000 divided by the conversion price ($25)
2
Q
Parity price of bond
A
Conversion ratio multiplied by Current Price
3
Q
Treasury bond: 104.25(/32)
A
104 + (25 divided by 32)
4
Q
Current Yield
A
Annual interest divided by Market Price
5
Q
Parity price of stock
A
Current bond price divided by conversion ratio
6
Q
Puttable bond
A
With an embedded put option.
- The right to demand repayment of the bond
- Can exercise on 1 or more specified dates
7
Q
T- Bills
A
- 4, 13, 26, and 52 weeks
- Issued at a discount
- Mature at par
8
Q
T-notes
A
- 2, 3, 5, 7 months
- Pay interest every 6 months
9
Q
T bonds
A
- 10-30 years
- Pay interest every 6 months
10
Q
T-STRIPS
A
- 6 months to 30 years
- Issued at a discount and mature at par
11
Q
TIPS
A
- 5, 10, and 20 years
- Pay interest every 6 months
- Inlfation and CPI ajusted
12
Q
NCD’s
A
- $100k - 1m
- Secondary market
- Maturities less than 1 year
13
Q
Federal funds rate
A
The rate that banks charge for overnight loans
