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Definition of ISMA
International Security Market Association. isma is a Swiss law association located in Zurich that
Floating rate note whose interest rate is reset at more frequent intervals than the rollover
A technical trading strategy that combines mechanical rules, such as the CRisma
Unemployment due to a mismatch between the skills or location of labor and the skills or location required by firms.
Schedule of depreciation rates allowed for tax purposes.
A bond on which interest accrues, but is not paid to the investor during the time of accrual.
bonds that are not registered on the books of the issuer. Such bonds are held in physical form by
bonds are debt and are issued for a period of more than one year. The U.S. government, local
A contract for privately placed debt.
A contractual provision in a bond indenture. A positive covenant requires certain actions, and
bond yield calculated on an annual percentage rate method. Differs from annual
The contract that sets forth the promises of a corporate bond issuer and the rights of
Designing a portfolio so that its performance will match the performance of some bond index.
A conventional unit of measure for bond prices set at $10 and equivalent to 1% of the $100 face
With respect to convertible bonds, the value the security would have if it were not convertible
The method used for computing the bond-equivalent yield.
The annualized yield to maturity computed by doubling the semiannual yield.
A system that monitors and evaluates the performance of a fixed-income portfolio , as well as the
bonds issued by emerging countries under a debt reduction plan.
bond whose principal repayment is linked to the price of another security. The bonds are
Foreign bond issue made in London.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
Collateral trust bonds
A bond in which the issuer (often a holding company) grants investors a lien on
Insurance that a construction contract will be successfully completed.
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
bonds that can be converted into common stock at the option of the holder.
A eurobond that can be converted into another asset, often through exercise of
Debt obligations issued by corporations.
High-coupon bonds that sell at only at a moderate premium because they are callable at a
An unsecured bond whose holder has the claim of a general creditor on all assets of the
A bond issued with a very low coupon or no coupon and selling at a price far below par
Debt sold for less than its principal value. If a discount bond pays no interest, it is called a
Municipal revenue bonds for which quotes are given in dollar prices. Not to be confused with
Dollar price of a bond
Percentage of face value at which a bond is quoted.
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Equivalent bond yield
Annual yield on a short-term, non-interest bearing security calculated so as to be
A bond that is (1) underwritten by an international syndicate, (2) offered at issuance
Eurobonds denominated in U.S.dollars.
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
Eurobonds denominated in Japanese yen.
bond whose maturity can be extended at the option of the lender or issuer.
Federal Reserve System
The central bank of the U.S., established in 1913, and governed by the Federal
Government bonds that are acceptable at par in payment of federal estate taxes when owned by
A bond issued on the domestic capital market of anther company.
Foreign bond market
That portion of the domestic bond market that represents issues floated by foreign
Full coupon bond
A bond with a coupon equal to the going market rate, thereby, the bond is selling at par.
General obligation bonds
Municipal securities secured by the issuer's pledge of its full faith, credit, and
bonds that are designed so as to qualify for immediate trading in any domestic capital market
See: Government securities.
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
A bond on which the payment of interest is contingent on sufficient earnings. These bonds are
bond whose payments are linked to an index, e.g. the consumer price index.
Industrial revenue bond (IRB)
bond issued by local government agencies on behalf of corporations.
A municipal bond backed both by the credit of the municipal issuer and by commercial
A collective term that refers to global bonds, Eurobonds, and foreign bonds.
Investment grade bonds
A bond that is assigned a rating in the top four categories by commercial credit
A bond with a speculative credit rating of BB (S&P) or Ba (Moody's) or lower is a junk or high
Just-in-time inventory systems
systems that schedule materials/inventory to arrive exactly as they are
bond with a stream of coupon payments that are the same throughout the life of the bond.
Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.
bonds with a long current maturity. The "long bond" is the 30-year U.S. government bond.
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
bonds with a long current maturity. The "long bond" is the 30-year U.S. government bond.
A bond in which the issuer has granted the bondholders a lien against the pledged assets.
State or local governments offer muni bonds or municipals, as they are called, to pay for
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also
Positive covenant (of a bond)
A bond covenant that specifies certain actions the firm must take. Also called
A bond that is selling for more than its par value.
Progressive tax system
A tax system wherein the average tax rate increases for some increases in income but
A bond that will make only one payment of principal and interest. Also called a zerocoupon
A bond that the holder may choose either to exchange for par value at some date or to extend for a
Also called a prerefunded bond, one that originally may have been issued as a general
A bond whose issuer records ownership and interest payments. Differs from a bearer bond
A bond issued by a municipality to finance either a project or an enterprise where the issuer
A yen-denominated bond issued in Tokyo by a non-Japanese borrower. Related: bulldog
Corporate bonds arranged so that specified principal amounts become due on specified dates.
bond that may be issued in several series under the same indenture.
Dollar bond issued in Japan by a nonresident.
bonds with short current maturities.
A bond that will make only one payment of principal and interest.
Speculative grade bond
bond rated Ba or lower by Moody's, or BB or lower by S&P, or an unrated bond.
Split-rate tax system
A tax system that taxes retained earnings at a higher rate than earnings that are
A bond that pays a lower coupon rate for an initial period which then increases to a higher
Stratified sampling bond indexing
A method of bond indexing that divides the index into cells, each cell
Subordinated debenture bond
An unsecured bond that ranks after secured debt, after debenture bonds, and
A eurobond issued by a Japanese corporation.
Common to all businesses.
Also called undiversifiable risk or market risk, the minimum level of risk that can be
Systematic risk principle
Only the systematic portion of risk matters in large, well-diversified portfolios.
Often referred to as bullet-maturity bonds or simply bullet bonds, bonds whose principal is
Debt obligations of the U.S. Treasury that have maturities of 10 years or more.
Two-tier tax system
A method of taxation in which the income going to shareholders is taxed twice.
Also called the diversifiable risk or residual risk. The risk that is unique to a company
U.S. Treasury bond
U.S. government debt with a maturity of more than 10 years.
Variable rated demand bond (VRDB)
Floating rate bond that can be sold back periodically to the issuer.
Foreign bonds denominated in US$ issued in the United States by foreign banks and
Also known as an accrual bond or accretion bond; a bond on which interest accretes interest but is not
Zero coupon bond
Such a debt security pays an investor no interest. It is sold at a discount to its face price
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