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The Fisher equation can be used in the analysis of bonds.The real return on a bond is roughly equivalent to the nominal interest rate minus the expected inflation rate. But if actual inflation exceeds expected inflation during the life of the bond, the bondholder's real return will suffer.
Pages in category "Banking terms" The following 146 pages are in this category, out of 146 total. This list may not reflect recent changes. 0–9. 3-6-3 Rule; A.
In finance, a bond is a type of security under which the issuer owes the holder a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the maturity date and interest (called the coupon) over a specified amount of time. [1])
Financial engineering is a multidisciplinary field involving financial theory, methods of engineering, tools of mathematics and the practice of programming. [3] It has also been defined as the application of technical methods, especially from mathematical finance and computational finance, in the practice of finance.
[2] Convexity is a measure of the curvature or 2nd derivative of how the price of a bond varies with interest rate, i.e. how the duration of a bond changes as the interest rate changes. [3] Specifically, one assumes that the interest rate is constant across the life of the bond and that changes in interest rates occur evenly.
On 31 October 2014 the UK Government announced that it would redeem the 4% consols in full in early 2015. [2] It did so on 1 February 2015, and redeemed the 3 1 ⁄ 2 % and 3% bonds between March and May of that year. The final 2 3 ⁄ 4 % and 2 1 ⁄ 2 % bonds were redeemed on 5 July 2015. [3]
Usually, a surety bond or surety is a promise by a surety or guarantor to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation.
A certificate of deposit (CD) is a time deposit sold by banks, thrift institutions, and credit unions in the United States. CDs typically differ from savings accounts because the CD has a specific, fixed term before money can be withdrawn without penalty and generally higher interest rates.