Debt

Question 1

Dollar Bond

Answer 1

Municipal bond that is quoted in terms of its dollar price instead of its yield to maturity

Question 2

Inflation

Answer 2

Rise of prices of goods and services

Question 3

Puttable Bond

Answer 3

bond that can be redeemed at face value by the holder at specific times before maturity. Investors will typically us this put feature when interest rates are rising, allowing the holder to receive the par value of the bond, which can be reinvested at higher interest rates

Question 4

Call Premium

Answer 4

the amount above par that an issuer will pay a preferred stockholder or bondholder to call in a security early

Question 5

Basis

Answer 5

Yield to Maturity

Question 6

Par

Answer 6

Face value of the bond

Question 7

Coupon or coupon rate

Answer 7

rate of interest that the bond issuer will pay to the bondholder

Question 8

maturity

Answer 8

specified date when the issuer will redeem the bond at par value

Question 9

term bonds

Answer 9

bond issues that have single scheduled maturity date and single coupon rate

Question 10

zero-coupon bonds

Answer 10

bonds that pay NO interest but are issued at a deep discount and mature at par

Question 11

serial bonds

Answer 11

structured so that a portion of the outstanding bonds mature at regular intervals until all the bonds have matured