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Bond Terminology
1. Finance Midterm Study
| Question | Answer |
|---|---|
| Face Value/Principle | Par value, due at bond maturity. Notional amount of a bond used to compute interest payments. |
| Coupon Rate | Determines the amount of each coupon payment of a bond. |
| Premium Bond | The price the bond trades at is greater than its face value. |
| Discount Bond | The price the bond trades at is less than its face value. |
| Zero-Coupon | A single future payment. |
| Interest Paying Bond | Annuity with an additional final future payment. |