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Business management> Notes > FINANCIAL ECONOMICS WEEK 3: VALUATION OF FIXEDINCOME SECURITIES

FINANCIAL ECONOMICS WEEK 3: VALUATION OF FIXEDINCOME SECURITIES

Fixed income securities:  Securities that generate predetermined and fixed periodic payments.  Examples include bonds, loans and mortgages, preferred stock etc.  We focus on bonds.  Maturity: the length of time for which a bond exists.  Face value: the principal amount that is promised to be repaid at maturity.  Coupon payments: the periodic interests generated by a bond.  Coupon rate: the ratio of coupon payments over the face value. Usually expressed in annual terms. ... [Show More]

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