Quizlet Chapter 10 Flashcards
1
Q
issue price / bond proceeds
A
cash received by the borrower at initiation
2
Q
principal / face value
A
amount of cash paid at maturity
3
Q
maturity
A
life of the bond; how long interest
4
Q
coupon payment
A
principal payments made periodically
- amount determined by coupon rate
4
Q
stated/coupon rate
A
rate used to compute periodic principal payments
5
Q
effective/market rate
A
rate at which interest accrues
6
Q
zero-coupon bonds
A
bonds that do not have periodic principal payments
- no coupon rate or payments
7
Q
coupon bonds
A
bonds that pay regular coupon interest payments until maturity when the face value is also paid
- issued at par, discount, or premium
8
Q
par bond
A
