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11-4 Vocabulary JW

Vocabulary JW

QuestionAnswer
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.
Created by: joannw15
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