Chap1Notes - Fixed-Income Securities and Markets An...

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1 Fixed-Income Securities and Markets – An Overview What are fixed-income securities? What are the key categories of players in debt markets or fixed income securities markets, and what are their objectives? And finally what are the sources of risk and return in debt securities? What are Fixed-Income Securities? Fixed-income securities or Bonds are debt instrument requiring the issuer or the borrower to repay to the lender the amount borrowed plus interest (usually fixed) over a specified period of time (usually fixed) . A typical “plain vanilla” bond specifies: 1. The Maturity date: A fixed date when the amount borrowed (i.e. principal) is due; 2. Coupon Rate: the fixed contractual amount of periodic interest payment, called coupon payments, which typically is paid every six months. 3. Principal: the amount borrowed, par value or face value Fixed Income Securities Markets or Bond Markets The U.S. bond markets can be divided into six Sectors: 1. Treasury sector –
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This note was uploaded on 04/26/2010 for the course FIN 333 taught by Professor Nasseh during the Spring '10 term at Saint Louis.

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Chap1Notes - Fixed-Income Securities and Markets An...

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