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36 Cards in this Set
- Front
- Back
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The trust indenture act of 1939 |
Requires corporate bonds of 5 million or more and greater than 27 days to maturity to be issued under a trust indenture, a legal contract between the bond ensure in a trustee representing bone holders. |
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Bond trustee |
Usually a commercial bank or trust company. The stress dancers compliance with the covenants of the indenture and ask him but half of the bottle |
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How are bonds priced |
Par, premium, and discount |
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Basis point |
The basis point is one 100% hundred basis points equals 1% therefore 75 points is .75%, 50 basis points is 50% so |
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A bond certificate has what on it |
Name of issuer, interest rate and payment date, maturity date, call features, principal amount, CUSIP number for identification, dated date, reference to the blonde in denture |
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Two blonde Raiders standard and pours and Moody's |
Two blonde Raiders standard and pours and Moody's |
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Maturity |
The longer the turn to maturity the greater the risk to the bondholders long term temperature to experience greater fluctuation in price or volunteer Tilipi then short-term bonds |
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Redemption |
Occurs when the maturity date hits it will equal the last semi annual interest payment plus the principle of the bond |
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Calling bonds |
Call feature allows the issue to redeem a bond issue before it's maturity date either in whole or in part the assured does this by notifying Dunn holders that it will redeem the bonds of the particular price in a certain date |
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Call premium |
Bonset our colds are usually brought back from her by this you're at a premium |
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Newly issued bond call |
Call protection period of 5/10 years to provide some safety to investors |
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Under what economic circumstances do issuers call Bonds |
Bonds are typically called when interest rates are declining. Consider the issuers side: would you want to pay more interest for the use of money and you need to? |
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Yield |
Expresses the cash interest payments in relation to the bonds value. Yield is determined by the issuance credit quality prevailing interest rates time to maturity and call futures bonds can be quoted and traded in terms of their-year-old as well as their price expressed as a percentage of par dollar amount |
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Nominal yield |
Is set at issuance and printed on the face of the bond. Nominal-year-old is a fixed percentage of the bonds par value and is also known as the coupon or stated yield |
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Current-year-old |
Annual interest divided by market price equals current you'll |
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You'll to maturity |
Reflects the annualized return of a bond if held to maturity it is most comprehensive measure for comparison of Bonnie else |
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You'll to maturity |
Reflects the annualized return of a bond if held to maturity it is most comprehensive measure for comparison of Bonnie else |
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Marketable government securitie |
Treasury bills or T-bills, treasury notes, treasury bonds, treasury insulated protection securities, treasury strips |
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T-bills |
Short-term obligations in, unlike most other debt securities are issued at a discount from par. Immature and 413 26 or 54 weeks. |
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Treasury notes |
Intermediate maturity 2 to 10 years. They are traded with weird pricing.. |
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Treasury bonds |
More than 10 years to miss church we priced like T notes |
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Tips treasury inflation protection |
Helps protect investors against purchasing power risk. There issued with a fixed interest rate, but the principal amount is adjusted semi annually by an amount equal to the change in the consumer price index, the standard measurement of inflation. These issues these issues are sold at lower interest rates than conventional fixed-rate treasury securities because of their age |
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Tips treasury inflation protection |
Helps protect investors against purchasing power risk. There issued with a fixed interest rate, but the principal amount is adjusted semi annually by an amount equal to the change in the consumer price index, the standard measurement of inflation. These issues these issues are sold at lower interest rates than conventional fixed-rate treasury securities because of their age |
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Treasury strips
Separate trading of registered interest and principal of securities |
Strips are a type of zero coupon created from US treasury notes in on when the treasury sell separate receipts against the principal and coupon payment. The securities underlining treasury strips are the US government's direct obligation. Strips are not issued or sold directly to investors. Strips can be purchased and Hilda only through financial institutions and government security broke |
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Marketable government securities |
Series EE bonds, series HH bonds, series I bonds |
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Series EE bonds |
Nonmarketable government security. The maximum that can be purchased is $10,000 a year they're sold out of face value starting at $25.earned a fixed rate of interest |
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Series H |
Nonmarketable government security. They are not issued September 1, 2004. However billions of dollars of them are still outstanding they are considered current income securities and pay a fixed rate of interest every six months until maturity or redemption which ever comes first |
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Series H |
Nonmarketable government security. They are not issued September 1, 2004. However billions of dollars of them are still outstanding they are considered current income securities and pay a fixed rate of interest every six months until maturity or redemption which ever comes first |
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Series I bones are low risk liquid saving product designed to protect investor from inflation risk |
5000 is the maximum they can be purchased in a calendar year bunch of annual interest rate their flex the combined effects of the fixed rate in the semi annual inflation rate of interest is added to the barn monthly interest paid on the bone is redeem their sold and 50, 75, hundred, 200, 500, thousand, 5000 values |
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Government agencies |
GNMA or commonly known as Ginnie Mae
FHLMC otherwise known as Freddie Mac
F n MA otherwise known as a fanny Mae
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Government agencies |
GNMA or commonly known as Ginnie Mae
FHLMC otherwise known as Freddie Mac
F n MA otherwise known as a fanny Mae
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GNMA |
Government national mortgage Association
Is a government owned corporation within the department of housing and urban development. It's guaranteed by the full faith and credit if US government.
GEN M a buys Federal housing administration in the veterans administration mortgages and actions them to private lenders, to pool the mortgage is to create pastors certificates for sale to investor. Thus, monthly interest and principal payments from the pool of mortgages passed through to investors
Unlike traditional Bonset pay interest every six months and returns and investors principal in one lump sum at maturity getting maze pay interest at return a portion of principle to investors each month
With virtually no default risk, the primary risk in GNMA has to do it changes in interest rates in general. |
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Gmma |
Are the only agency security back in full by the US government. Issues past two certificates. Investors receive interest and principal on a monthly basis; investors by GEN M a is to satisfy income objective. Yields on GNMA's are slightly higher then on treasuries GNMA's are subject to interest rate and prepayrisk |
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Agency like organizations |
Federal home loan mortgage Corporation's Freddie Mac
Federal national mortgage Association Fannie Mae |
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FHLMC, Freddie Mac |
Federal home loan mortgage corporation was chartered by Congress in 1970 to provide the quiddity stability and affordability to the nations housing market Freddie Mac is backed by its own issuing authority as a pass-through certificate Freddie Mac distributes principal and interest payment semi annually |
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F and M a, Fannie Mae |
Federal national mortgage Association was founded in 1938 during the great depression as a part of the new deal. It provides mortgage capital allowing lenders to reinvest your assets into more lending in effect increasing the number of lenders in the mortgage market by reducing reliance on Savings and Loan Association's Fannie Mae distributes principal and interest payment semi annually |
