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Definition of Tranche
One of several related securities offered at the same time. tranches from the same offering usually
Bond whose principal repayment is linked to the price of another security. The bonds are
A security backed by a pool of pass-throughs , structured so that
An international equity placement where the offering is split into two
For the CMO tranche, the date the last payment would occur at zero CPR.
A bond on which interest accrues, but is not paid to the investor during the time of accrual.
An approximate measure of the liability of a plan in the event of a
Variations of mortgage instruments such as adjustable-rate and variablerate
An investor who believes a stock or the overall market will decline. A bear market is a prolonged period
Any market in which prices are in a declining trend.
A market in which stock or bond prices are generally
A prolonged period of falling stock market prices.
A situation in which large traders sell positions with the intention of driving prices down.
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 long-term, interest-bearing promissory note that companies may use to borrow money for periods of time such as five, ten, or twenty years.
A long-term debt instrument in which the issuer (borrower) is
Security that obligates the issuer to make specified payments
A financial asset taking the form of a promise by a borrower to repay a specified amount (the bond's face value) on a maturity date and to make fixed periodic interest payments.
Usually a fixed interest security under which the issuer contracts to pay the lender a fixed principal amount at a stated date in the future, and a series of interest payments, either semi-annually or annually. Interest payments may vary through the life of bond.
A debt security issued by a government or company. You receive regular interest payments at specified rates while you hold the bond and you receive the face value when it matures. Short-term bonds mature in less than five years; medium-term bonds mature in six to ten years; and long-term bonds mature in eleven years or greater.
Fixed interest security issued by a corporation or government, having a specific maturity date.
A contract for privately placed debt.
A contractual provision in a bond indenture. A positive covenant requires certain actions, and
The method used for computing the bond-equivalent yield.
Bond equivalent yield
bond yield calculated on an annual percentage rate method. Differs from annual
The annualized yield to maturity computed by doubling the semiannual yield.
Bond Equivalent Yield
bond yield calculated on an annual percentage rate method
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
A system that monitors and evaluates the performance of a fixed-income portfolio , as well as the
Amounts owed by the company that have been formalized by a legal document called a bond.
bonds issued by emerging countries under a debt reduction plan.
An investor who thinks the market will rise. Related: bear.
Bull CD, Bear CD
A bull CD pays its holder a specified percentage of the increase in return on a specified
Any market in which prices are in an upward trend.
A market in which stock or bond prices are generally rising.
A prolonged period of rising stock market prices.
A spread strategy in which an investor buys an out-of-the-money put option, financing it by
Foreign bond issue made in London.
The foreign market in the United Kingdom.
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
A bank term loan that calls for no amortization.
A strategy in which a portfolio is constructed so that the maturities of its securities are highly
Words used to describe investor attitudes. bullish refers to an optimistic outlook while
A bond that allows the issuer to buy back the bond at a
bond that may be repurchased by the issuer before maturity at specified call price.
Canada Savings Bonds
A bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value.
mortgage against which no additional debt may be issued.
Collateral trust bonds
A bond in which the issuer (often a holding company) grants investors a lien on
A loan made on real estate collateral, other than a residential property, in which a mortgage is given to secure payment of principal and interest.
Insurance that a construction contract will be successfully completed.
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
A loan based on the credit of the borrower and on the collateral for the mortgage.
bond that the holder may exchange for a specified number of shares.
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.
Any bond with a coupon. Contrast with discount bond.
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
A bond with no coupons, priced below its face value; the return on this bond comes from the difference between its face value and its current price.
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.
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
A debt security issued in a market other than the home market of
bond that is marketed internationally.
Eurobonds denominated in U.S.dollars.
Eurobonds denominated in Japanese yen.
bond whose maturity can be extended at the option of the lender or issuer.
Conventional bonds for which the coupon rate is set as a fixed percentage of the par value.
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
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that
Full coupon bond
A bond with a coupon equal to the going market rate, thereby, the bond is selling at par.
Full faith-and-credit obligations
The security pledges for larger municipal bond issuers, such as states and
GEMs (growing-equity mortgages)
mortgages in which annual increases in monthly payments are used to
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
GMCs (guaranteed mortgage certificates)
First issued by Freddie Mac in 1975, GMCs, like PCs, represent
See: Government securities.
Government National Mortgage Association (Ginnie Mae)
A wholly owned U.S. government corporation
Graduated-payment mortgages (GPMs)
A type of stepped-payment loan in which the borrower's payments
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
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
An insured mortgage protects only the mortgage lender in case you do not make your mortgage payments. This coverage is provided by CMHC [Canada mortgage and Housing Corporation] and is required if a person has a high-ratio mortgage. [A mortgage is high-ratio if the amount borrowed is more than 75% of the purchase price or appraised value, whichever is less.]
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
bond with a rating below Baa or BBB.
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.
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