Zero-coupon Bond
A zero-coupon bond (also discount bond or deep discount bond) is a bond in which the face value is repaid at the time of maturity. Unlike regular bonds, it does not make periodic interest payments or have so-called coupons, hence the term zero-coupon bond. When the bond reaches maturity, its investor receives its par (or face) value. Examples of zero-coupon bonds include US Treasury bills, US savings bonds, long-term zero-coupon bonds, and any type of coupon bond that has been stripped of its coupons. Zero coupon and deep discount bonds are terms that are used interchangeably. In contrast, an investor who has a regular bond receives income from coupon payments, which are made semi-annually or annually. The investor also receives the principal or face value of the investment when the bond matures. Some zero coupon bonds are inflation indexed, and the amount of money that will be paid to the bond holder is calculated to have a set amount of purchasing power, rather than a s ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
Bond (finance)
In finance, a bond is a type of Security (finance), security under which the issuer (debtor) owes the holder (creditor) 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 (finance), maturity date and interest (called the coupon (bond), coupon) over a specified amount of time.) The timing and the amount of cash flow provided varies, depending on the economic value that is emphasized upon, thus giving rise to different types of bonds. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan or IOU. Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds, to finance current expenditure. Bonds and Share capital, stocks are both Security (finance), securities, but the major difference between the two is that (capital) stockholders h ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
New Zealand
New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of island countries, sixth-largest island country by area and lies east of Australia across the Tasman Sea and south of the islands of New Caledonia, Fiji, and Tonga. The Geography of New Zealand, country's varied topography and sharp mountain peaks, including the Southern Alps (), owe much to tectonic uplift and volcanic eruptions. Capital of New Zealand, New Zealand's capital city is Wellington, and its most populous city is Auckland. The islands of New Zealand were the last large habitable land to be settled by humans. Between about 1280 and 1350, Polynesians began to settle in the islands and subsequently developed a distinctive Māori culture. In 1642, the Dutch explorer Abel Tasman became the first European to sight and record New Zealand. ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
Zero Coupon Swap
In finance, a zero coupon swap (ZCS) is an interest rate derivative (IRD). In particular it is a linear IRD, that in its specification is very similar to the much more widely traded interest rate swap (IRS). General description A zero coupon swap (ZCS)Pricing and Trading Interest Rate Derivatives: A Practical Guide to Swaps J H M Darbyshire, 2017, is a derivative contract made between two parties with terms defining two 'legs' upon which each party either makes or receives payments. One leg is the traditional fixed leg, whose cashflows are determined at the outset, usually defined by an agreed fixed rate of interest. A second leg is the traditional floating leg, whose payments at the outset are forecast but subject to change and dependent upon future publication of the interest rate inde ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
Z-spread
The Z-spread, ZSPRD, zero- volatility spread, or yield curve spread of a bond is the parallel shift or spread over the zero-coupon Treasury yield curve required for discounting a predetermined cash flow schedule to arrive at its present market price. The Z-spread is also widely used in the credit default swap (CDS) market as a measure of credit spread that is relatively insensitive to the particulars of specific corporate or government bonds. Since the Z-spread uses the entire yield curve to value the individual cash flows of a bond, it provides a more realistic valuation than an interpolated yield spread based on a single point of the curve, such as the bond's final maturity date or weighted-average life. However, the Z-spread does not incorporate variability in cash flows, so a fuller valuation of an interest-rate-dependent security often requires the more realistic (and more complicated) option-adjusted spread (OAS). Definition The Z-spread of a bond is the number o ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
Principal Only
A collateralized mortgage obligation (CMO) is a type of complex debt security that repackages and directs the payments of principal and interest from a collateral pool to different types and maturities of securities, thereby meeting investor needs. CMOs were first created in 1983 by the investment banks Salomon Brothers and First Boston for the U.S. mortgage liquidity provider Freddie Mac. The Salomon Brothers team was led by Lewis Ranieri and the First Boston team by Laurence D. Fink, although Dexter Senft also later received an industry award for his contribution). Legally, a CMO is a debt security issued by an abstraction—a special purpose entity—and is not a debt owed by the institution creating and operating the entity. The entity is the legal owner of a set of mortgages, called a ''pool''. Investors in a CMO buy bonds issued by the entity, and they receive payments from the income generated by the mortgages according to a defined set of rules. With regard to term ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
Original Issue Discount
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. The accurate determination of principal and interest is necessary in United States tax law to determine the basis of property and to determine whether an amount paid is deductible and includible as interest, or simply a nontaxable debt repayment. Example Most loans require interest payments. Loans that require inadequate or no interest payments bear original issue discount. In the United States, whether interest is adequate is determined with reference to the applicable federal rate (AFR). Under the Internal Revenue Code, original issue discounts on debt instruments are taxed each year, even though the debt may not be repaid until a later date. The tax system will impute an interest rate on the loan. The rules f ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
Immunization (finance)
In finance, interest rate immunization is a portfolio management strategy designed to take advantage of the offsetting effects of interest rate risk and reinvestment risk. In theory, immunization can be used to ensure that the value of a portfolio of assets (typically bonds or other fixed income securities) will increase or decrease by the same amount as a designated set of liabilities, thus leaving the equity component of capital unchanged, regardless of changes in the interest rate. It has found applications in financial management of pension funds, insurance companies, banks and savings and loan associations. Immunization can be accomplished by several methods, including cash flow matching, duration matching, and volatility and convexity matching. It can also be accomplished by trading in bond forwards, futures, or options. Other types of financial risks, such as foreign exchange risk or stock market risk, can be immunised using similar strategies. If the immunizati ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
Insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect against the risk of a contingent or uncertain loss. An entity which provides insurance is known as an insurer, insurance company, insurance carrier, or underwriter. A person or entity who buys insurance is known as a policyholder, while a person or entity covered under the policy is called an insured. The insurance transaction involves the policyholder assuming a guaranteed, known, and relatively small loss in the form of a payment to the insurer (a premium) in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms. Furthermore, it usually involves something in which the insured has an insurable interest established by o ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
Pension Fund
A pension fund, also known as a superannuation fund in some countries, is any program, fund, or scheme which provides pension, retirement income. The U.S. Government's Social Security Trust Fund, which oversees $2.57 trillion in assets, is the world's largest public pension fund. Pension funds typically have large amounts of money to invest and are the major investors in listed and private companies. They are especially important to the stock market where large institutional investors dominate. The largest 300 pension funds collectively hold about USD$6 Trillion (short scale), trillion in assets. In 2012, PricewaterhouseCoopers estimated that pension funds worldwide hold over $33.9 trillion in assets (and were expected to grow to more than $56 trillion by 2020), the largest for any category of institutional investor ahead of mutual funds, insurance companies, currency reserves, sovereign wealth funds, hedge funds, or private equity. Classifications Open vs. closed pension fund ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
1969 $100K Treasury Bill (front)
1969 (Roman numerals, MCMLXIX) was a common year starting on Wednesday of the Gregorian calendar, the 1969th year of the Common Era (CE) and ''Anno Domini'' (AD) designations, the 969th year of the 2nd millennium, the 69th year of the 20th century, and the 10th and last year of the 1960s decade. Events January * January 4 – The Government of Spain hands over Ifni to Morocco. * January 5 – Ariana Afghan Airlines Flight 701 crashes into a house on its approach to London's Gatwick Airport, killing 50 of the 62 people on board and two of the home's occupants. * January 14 – USS Enterprise fire, An explosion aboard the aircraft carrier USS Enterprise (CVN-65), USS ''Enterprise'' near Hawaii kills 28 and injures 314. * January 16 – First successful docking of two crewed spacecraft in orbit and the first transfer of crew from one space vehicle to another (by a space walk) between Soviet craft Soyuz 5 and Soyuz 4. * January 18 – Failure of Soyuz 5's service module to separ ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
|
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 contiguous states border Canada to the north and Mexico to the south, with the semi-exclave of Alaska in the northwest and the archipelago of Hawaii in the Pacific Ocean. The United States asserts sovereignty over five Territories of the United States, major island territories and United States Minor Outlying Islands, various uninhabited islands in Oceania and the Caribbean. It is a megadiverse country, with the world's List of countries and dependencies by area, third-largest land area and List of countries and dependencies by population, third-largest population, exceeding 340 million. Its three Metropolitan statistical areas by population, largest metropolitan areas are New York metropolitan area, New York, Greater Los Angeles, Los Angel ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |