LO 2.a And LO 2.b Flashcards
1
Q
Savings bond
A
Drbt issued by fed govt. Purchased or redeemed at banks or US treasury. Do not tradenon 2ndary market, are a security but are exempt from seciety laws.Known as Series maturity is only for savings bonds.
2
Q
Coupon rate
A
Represents the interest rate the issuer has agreed to pay. Also called stated yield or nominal yield. Usually paod semi annually.
3
Q
Pricing
A
Once bond is trading can trade at a price of par, a premium to par or a discount to par.
Bond pricing is measured in points. 1% or $10 a point.
4
Q
Basis points (BPS)
A
How yields are measured. A measurement of yield equal to 1/100 of 1%. A full 1% is madenup of 100 basis pts.
5
Q
Yield types
A
Nominal yield
Current yield
Yield to maturity
Yield to call
