Random #5 Flashcards
Price paid for a bond
Face Value
Above Par or premium bond
A bond usually trades at above par or higher than face, when its income distributions are higher than those of other bonds currently available in the market. This occurs when interest rates have declined so that newly-issued bonds carry lower coupon rates.
Below Par
Traded at a discount below face value and traded less than 100 and Bonds trade below par as interest rates rise, as the issuer’s credit rating falls, or when the bond’s supply greatly exceeds demand.
Interest paid on a bond
Coupon
Yield that comes from a bond
Coupon rate
Breakout trading
Strategy of going on a particular trend- above a resistance level or below a support level
Momentum trading
a strategy established on trends of the prices and directions they are about to take.
Range trading
characterized by a market price that persists inside the line of resistance and support
Reversal trading
recognizing when the present trend is about to change direction
4 components of current account
goods, services, income, and current transfers.
Instead of DISC it’s GISC
529
no limit on contributions, owned by state and tax free distributions
ESA
Coverdall savings account. Limits how much you can make (110 or 220k for both) and how much you can contribute (2k per year). Must withdraw at 18
Internal Rate of Return IRR is used how?
Use to evaluate profitability of investments in order to rank them. When net present value is zero the project broke even
What fuels inflation?
rising taxes, rising government spending, and a rising money supply.
Which gov’t security has the shortest duration?
T-Bill (B for below it all)
