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Unformatted text preview: ds of funds. An investment that provides fixed payments known in advance, e.g., a bond. A debt security or “IOU” The issuer promises to make regular interest payments and/or a single lump‐sum payment at maturity Amount paid at maturity to holder of a bond When final payment is made Periodic interest payment made to a bond holder A bond that sells for less than its par value A bond that sells for more than its par value Gives the issuer of the bond the right to buy it back at a pre‐determined price. A bond without coupons. Will be sold at a discount. 1) Treasury Bonds 2) Corporate Bonds 3) Municipal Bonds Corporate Bonds Debt of the US Government Municipal Bonds Junk Bonds Convertible bond Mortgage‐backed security Asset‐backed securities Preferred stock Common stock Dividend Stock dividend Stock split American Depositary Receipt (ADR) Derivatives securities Examples of derivative securities Option Long‐term debt securities of various types sold by corporations 1) Treasury Bills ‐ Maturity of a year or less 2) Treasury Notes ‐ Maturity of more than a year and less than 10 years 3) Treasury Bonds ‐ Maturity of 10 years or more Bonds issues by state and local governments Bonds with higher probability of default that offer higher expected yields. Sometimes called high‐yield bonds. Bond with an option to convert into stock A type of asset‐backed security whose value is derived from an underlying pool of mortgages. A security whose val...
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This document was uploaded on 03/05/2014 for the course FIN 352 at CSU Northridge.

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