Ch 7 Crossword Renner

note

an unsecured debt, usually with a maturity under 10 years

coupon rate

the annual coupon divided by the face value/price of a bond

face value

The amount the bondholder will be repaid at maturity.

zero coupon bond

a bond that makes no coupon payments and is thus initially priced at a deep discount

current yield

a bond's annual coupon divided by its price

protective covenant

a part of the indenture limiting certain actions that might be taken during the term of the loan, usually to protect the lender's interest

sinking fund

an account managed by the bond trustee for the purpose of repaying bonds

call provision

an agreement giving the corporation the option to repurchase a bond at a specified price prior to maturity

debenture

an unsecured debt, usually with a maturity of 10 years or more

nominal interest

interest rate or rate of return that has not been adjusted for inflation

real rate

interest rates or rates of return that have been adjusted for inflation

bearer form

the form of bond issue in which the bond is issued without record of the owner's name; payment is made to whomever holds the bond

registered form

the form of bond issue in which the registrar of the company records ownership of each bond; payment is made directly to the owner of record

yield to maturity

the rate required in the market on a bond

Fisher effect

the relationship between nominal returns, real returns, and inflation

annual interest rate

the stated interest payment made on a bond

indenture

the written agreement between the corporation and the lender detailing the terms of the debt issue