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11-4 Vocabulary JW
Vocabulary JW
Question | Answer |
---|---|
Par Value | The amount that the bond issuer promises to pay the buyer at maturity. |
Maturity | the date when the bond is due to be repaid. |
Coupon rate | the interest rate a bondholder receives every year until a bond matures. |
Yield | The annual rate of return...how much money you may make because of your investment. |
Junk Bond | A high risk bond sold by corporations who wish to raise money for things like expanding their operations. |
Bond | A debt security...a contract issued by a corporation or governement promising to repay borrowed money, plus interest, on a specific point in time. |
Treasury Bonds | Treasury bonds are sold by the Federal government and have a maturity of more than 10 years. |
Municipal Bonds | A type of bond sold by a state or local goverment to fund projects. Interest is not taxed. |
Treasury Bills | Treasury bonds are sold by the Federal government and have a maturity of one year or less. |
Money Market Mutual Fund | Allows investors to own a variety of short-term financial assets. Gives higher yield than savings accounts. |
Certificate of Deposit | A savings certificate entitling the bearer to receive interest; Issued by commercial banks and are insured by the FDIC. |