Search results
Results from the WOW.Com Content Network
Original Issue Discount (OID) is a type of interest that is not payable as it accrues. OID is normally created when a debt , usually a bond , is issued at a discount . In effect, selling a bond at a discount converts stated principal into a return on investment, or interest.
However, if the bonds are callable, this comes at a cost to creditors, because the organization has an option on the bonds: The firm will choose to buy back discount bonds (selling below par) at their market price, while exercising its option to buy back premium bonds (selling above par) at par. Therefore, if interest rates fall and bond prices ...
The bonds are purchased from the market at $985.50. Given that $2.00 pays the accrued interest, the remainder ($983.50) represents the underlying value of the bonds. The following table illustrates the values of these terms. The market convention for corporate bond prices assigns a quoted (clean price) of $983.50.
The bond market (also debt market or credit market) is a financial market in which participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, but it may include notes, bills, and so on for public and private expenditures. The bond market has ...
The following are 16 bond market terms that every trader should know. Par Value: The par value of a bond is essentially the face value of the bond. Unfortunately, the bond market comes with its ...
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])
A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation.
The total cost of this purchase is $1,000 (50 shares x $20). ... For example, if a particular corn futures contract is trading at $3.50, while the current market price of the commodity today is $3 ...