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Bookmark or Share- Investment | Examples & Definition - InvestingAnswersA bond is an agreement between an investor and the company, government, or government agency that issues the bond. When investors buy a bond, they are loaning money to the issuer in exchange for interest and the return of principal at maturity. The bond return makes this an investment option. Real Estate
- Perpetual Bond Definition & Example - InvestingAnswersFor example, let's say a perpetual bond has a par value of $100 with a coupon rate of 5% and is trading at a discounted price of $95. Current Yield = [(0.05 x $100) / ($95)] X 100% = 5.26%. That means if you were to buy the perpetual bond at the discounted market price of $95 in this example, you would expect a 5.26% yield in perpetuity (forever).
- Clean Up Call - Definition and Example - InvestingAnswersWhat is a Clean Up Call? A clean up call, also known as a calamity call, is a feature of a collateralized mortgage obligation (CMO) that requires the issuer to pay off a portion of the CMO if the underlying mortgages don't generate enough cash to make the principal and interest payments on the CMOs.
- Financial Terms Starting with P - InvestingAnswersPerpetual Bond. Person to Person Payments (P2P) Personal Consumption Expenditures (PCE) Personal Income. ...
- Coupon Rate Definition & Example - InvestingAnswersThe coupon rate on the bond is 5%, which means the issuer will pay you 5% interest per year, or $50, on the face value of the bond ($1,000 x 0.05). Even if your bond trades for less than $1,000 (or more than $1,000), the issuer is still responsible for paying the coupon based on the face value of the bond.
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