Chapter 6 Fixed-Income Securities: Features and Types KT Flashcards
A bond secured by stocks or bonds of companies controlled by the issuing company, or other securities, which are deposited with a trustee.
collateral trust bond
The value of a bond or debenture that appears on the face of the certificate, ordinarily the amount the issuer will pay at maturity.
face value
A bond or debenture issue in which a predetermined amount of principal matures each year.
instalment debenture
A bond where the coupon payments and principal repayment are adjusted for inflation to provide a fixed real coupon rate.
real return bond
A bond that may be redeemed upon due notice by the bond issuer.
callable bond
Usually high quality federal or provincial government bonds where some or all of the interest coupons have been detached and are sold separately.
strip bond
The amount by which a preferred stock or bond sells below its par value.
discount
The rate of interest that appears on the certificate of a bond.
coupon rate
The rate of return investors would receive if they purchased a bond today and held it to maturity.
yield to maturity
Short-term government debt, issued at a discount to mature at par, in denominations ranging from $1,000 to $1,000,000.
treasury bill
A bond which may be exchanged by the owner for the common stock of the same company.
convertible bond
A certificate of indebtedness of a government or company backed only by the general credit of the issuer and unsecured by mortgage or lien on any specific asset.
debenture
A domestic issuer debt security, issued in another country, denominated in that foreign country’s currency.
foreign bond
A debt instrument secured by a physical asset for which the issuer promises to pay the holder a specified amount of interest based on the coupon rate, for a specified length of time, and to repay the loan on its maturity.
bond
A fund set up to retire most or all of a debt issue over a period of time.
sinking fund
