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52 Cards in this Set

  • Front
  • Back
future value
orgininal amount invested
value today
$100 today is (blank) valuable than in the future
when comparing move things into?
annuity as what time limit
none, goes on forever
other names for exchange rate rate
2.cost of capital
3.required return on investment
double money at 6%
72/6 = 12 years
market value
present value
finite series of equal dollar payments
ordinary annuity annuity due
o - payment occurs at end of the period
ad - paymnet occurs at beginning of the period
infinite series of equal payments
value * rate = income
discounted cash flow
calculating the present value of a future cash flow to determine its worth today
effective annual rate(ear)
interest rate expressed as if it were compounded once per year
annual percentage rate(apr)
interest rate charged per period multiplied by the number of periods per year
stated interest payment on the bond
face(par) value
principal amount of a bond that is repaid at the end of the term.
coupon rate
rate corp. promises to pay annually...annual coupon divided by the bond
maturity date
when par value is payed back to investors.
yield to maturity
rate required in the market on a bond
current yield
bonds annual coupon divided by its price
written agreement b/t corp and the lender detailing the terms of the debt issue
registered form
registered directly to a persons name
bearer form
issued without the record of someones name
bond value
pv coupons + pv of par
interest increase
pv decrease
ytm=coupon rate
pv=bond price
par value>bond price
par value<bond price
price risk
changes in price due to changes in interest rate
reinvestment rate risk
uncertainty concerning rates at which cash flows can be reinvested
short term has(blank) reinvestment rate than long term
semi annual coupons
double n; double i/y; half payment
-no ownership
-creditors have no votes
-interest tax deduct
-recourse if missed payments
-NOT tax deduct
-no legal recourse
-no bankruptcy
sinking funds provision
account managed by bond trustee for the purpose of repaying the bonds. company makes annual payments to the trustee who retires portion of debt
call provisions
corp. can buy bond prior to maturity
call premium
deffered call
amount price exceeds par value
-prohibit redeeming prior to date
protective covenant
certain actions to protect the bond holder. negative and positive covenants
unsecured debt no specific pledge of property is made
unsecured debt with maturity less than 10 years
secured debt
pledge of some assets
coupon rate
depends on orgs. credit rating
collateral and mortgages
listed in bond debenture
2.amount of bonds
3.descip. of security
4. repay
5. call
6.protec cov
preference in position over the other lenders and debts
subordinated debenture
type of seniority. where creditors are payed off before subordinated lenders
pure discount. maturity less the 1 year
coupon with orginal maturity b/t 1-10 yers
coupn debt with orginial maturity
zero coupon bonds
bond that makes no annual payment and is price at discount
floating rate bonds
coupon payments are adjustable
income bond
convertable bond
i-coupon payments depend on org. income
c-swapped for stock