Bonds

Floating-rate notes

A note on which interest payments are not fixed, but instead vary from period to period depending on the current level of a reference interest rate.

Bondholders

A person who loans a corporation money by buying debt securities.

mutual funds

A pool of money used by a company to purchase a variety of stocks, bonds or money market instruments. Provides diversification and professional management for investors.

equity

Amount of owners' or shareholders' portion of a business.

pension funds

Amounts of money put aside by corporations, nonprofit organizations, or unions to cover part of the financial needs of members when they retire

Above par

An interest rate quoted that would give a credit to the borrower.

Below par

An interest rate quoted that would require a charge to the borrower.

Investment grade

Bonds rated BBB or above.

gilts

British and Irish government securities

investors

Groups of individuals who invest their money in various types of companies in search of making a profit

Junk bonds

High-risk, high-interest bonds

Issue bonds

Loans from investors to government or company, to be paid back in set period of time plus interest

Measure the risk

Mierzyć ryzyko

bid prices

Prices at which a dealer is willing to buy an asset or a security, typically qualified by a maximum quantity (bid size).

offer prices

Prices at which a dealer is willing to sell an asset or a security, typically qualified by a maximum quantity (ask size). Also called ask price.

Represent the problem

Restate or visually represent the problem

principal

The amount of money borrowed

Treasury bonds

United States government bond with maturity of 30 years

Treasury notes

United States government obligation with a maturity of 2 to 10 years

creditor

a person who believes that he will be paid back the money that he loaned

insolvent

bankrupt

Corporate bonds

bonds issued by corporations

gilt - edged stock

bonds issued by some national governments. British origin. referred to the debt securities issued by the bank of England on behalf of His/Her Majesty treasury.

Convertibles

bonds or preferred stocks that can be exchanged for common stock at the option of the holder

Fallen angels

bonds that drop into junk territory

Zero coupon bonds

bonds that pay no annual interest but are sold at a discount below par, thus compensating investors in the form of capital appreciation

cash flows

cash payments to the holder of a security

Fluctuations

changes-- often from highs to lows and back again

dividends

earnings distributed to stockholders

Default

failure to pay back a loan

bond yield

rentowność obligacji

market makers

securities dealers that make a commitment to continuously offer to buy and sell the stock of a specific corporation listed on the NASDAQ exchange or traded in the OTC market

Treasury Bills

short-term United States government obligation with a maturity of 4, 13, 26, or 52 weeks and a minimum denomination of $100

yield

the annual rate of return on a bond if the bond were held to maturity

Liquidity

the ease with which an asset can be converted into cash

coupon rate

the interest rate that a bond issuer will pay to a bondholder

coupon

the stated interest payment made on a bond

maturity

the time at which payment to a bondholder is due

Allocate money

to give a share of available money to a person or organization

secondary bond market

when investors buy and sell previously issued bonds before their maturity date