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  2. Coupon (finance) - Wikipedia

    en.wikipedia.org/wiki/Coupon_(finance)

    Coupon (finance) In finance, a coupon is the interest payment received by a bondholder from the date of issuance until the date of maturity of a bond. [ 1] Coupons are normally described in terms of the "coupon rate", which is calculated by adding the sum of coupons paid per year and dividing it by the bond's face value. [ 2]

  3. Effective interest rate - Wikipedia

    en.wikipedia.org/wiki/Effective_interest_rate

    The effective interest rate ( EIR ), effective annual interest rate, annual equivalent rate ( AER) or simply effective rate is the percentage of interest on a loan or financial product if compound interest accumulates in periods different than a year. [ 1] It is the compound interest payable annually in arrears, based on the nominal interest rate.

  4. Reinvestment risk - Wikipedia

    en.wikipedia.org/wiki/Reinvestment_risk

    Early redemption. One form of reinvestment risk is the possibility that the cash flows from an investment might somehow be cancelled or stopped before its stated maturity date. This could happen if the issuer has the right to redeem (or "call") a fixed income security before its contractual maturity date. In that case, the investor might not be ...

  5. Government bond - Wikipedia

    en.wikipedia.org/wiki/Government_bond

    A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest, called coupon payments, and to repay the face value on the maturity date. For example, a bondholder invests $20,000, called face value or principal, into a 10-year government bond ...

  6. Securitization - Wikipedia

    en.wikipedia.org/wiki/Securitization

    Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt ...

  7. Zero-coupon bond - Wikipedia

    en.wikipedia.org/wiki/Zero-coupon_bond

    v. t. e. A zero-coupon bond (also discount bond or deep discount bond) is a bond in which the face value is repaid at the time of maturity. [ 1] Unlike regular bonds, it does not make periodic interest payments or have so-called coupons, hence the term zero-coupon bond. When the bond reaches maturity, its investor receives its par (or face) value.

  8. Libor - Wikipedia

    en.wikipedia.org/wiki/Libor

    The London Inter-Bank Offered Rate ( Libor / ˈlaɪbɔːr /) [a] was an interest rate average calculated from estimates submitted by the leading banks in London. Each bank estimates what it would be charged were it to borrow from other banks. [1] [b] It is the primary benchmark, along with the Euribor, for short-term interest rates around the ...

  9. Risk-free bond - Wikipedia

    en.wikipedia.org/wiki/Risk-free_bond

    Risk-free bond. A risk-free bond is a theoretical bond that repays interest and principal with absolute certainty. The rate of return would be the risk-free interest rate. It is primary security, which pays off 1 unit no matter state of economy is realized at time . So its payoff is the same regardless of what state occurs.