The market for corporate bonds is what big face value

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the market for corporate bonds is what? bigFace value. the payment made when the bond maturesCoupon Rate. The stated rate of interest on bonds Most Important Investors of Corporate Bonds life insurance companies, pension funds, and mutual funds.*all are large institutions*Where do secondary market transactions take place? Over-the-counter or on exchanges.secondary market securities through OTC markets become what? thincorporate bond prices are more what than for other securities? volatilecorporate bond markets have what? little transparency, which makes it inefficienthow to calculate coupon rate? coupon payment/face value (payment made when bond matures)Yield to maturity. The rate of return earned on the present value of a bond bond if it is held to maturityzero coupon bonds. a bond paying no coupons that sells at a discount and provides only a payment of par value at maturitytreasury bills. zero coupon bonds, issued by the U.S. government, with a maturity of up to one year.convertible bonds. converted to common stockExample of zero-coupon bonds? Treasury BillsTreasury Bonds. risk-free bonds where you can invest money in it safelyname one example of a convertible bond. $1000 face-value bond (nominal value stated at issuer) can be converted into 1000 shares of common stock (equity in corporation)Coupon. The stated interest payment made on a bondvanilla bonds. straight bonds without unusual features paying interest/maturity over a period of time
effective annual yield. when bond compounds in effect for yearly yieldlump sum. maturity, single, one-time paymentWhat do you do with Treasury Bonds? pay lump sum (maturity payment) when bond maturesTreasury bond. risk-free bonds where you can invest money in it safely.Bond ratings. A rating assigned to a firm to measure the probability of default by a company like S&P or Moody's.term to maturity the length of time until the bond matures (longer term higher interest rates).Nominal Interest Rate. The stated interest rate on a loandefault risk premiumcompensation for the possibility that the issuer may not pay the interest or repay the principalDefault RiskRisk that a borrower will not pay the interest and/or principal on a loancall provisionan agreement giving the corporation the option to repurchase the bond at a specific price prior to maturity.Marketabilityhow quickly and easily a security can be sold at a low transaction cost and at fair market valueKnow risk characteristics involving debt instruments of corporate borrowing costs? -marketability-call provision-default risk-term to maturityhow does the interest rate risk affect the shape of the yield curve?upward bias to slope of yield curve.how does the expected rate of inflation affect the shape of the yield curve?bias slope of yield curve positively/negativelyhow does the cyclical movements of the interest rate affect the shape of the yield curve? highest rates at end of pr of business expansion, and lowest at bottom of recessionpresence of interest-rate risk

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