Bonds

Define each of the following terms: Bond; Treasury bond; corporate bond; municipal bond; foreign bond Par value; maturity date; coupon payment; coupon interest rate Floating-rate bond; zero coupon bond; original issue discount bond (OID) Call provision; redeemable bond; sinking fund Convertible bond; warrant; income bond; indexed bond (also called a purchasing power bond) Premium bond; discount bond Current yield (on a bond); yield to maturity (YTM); yield to call (YTC) Indentures; mortgage bond; debenture; subordinated debenture Development bond; municipal bond insurance; junk bond; investment-grade bond Real risk-free rate of interest, r*; nominal risk-free rate of interest, rRF Inflation premium (IP); default risk premium (DRP); liquidity; liquidity premium (LP) Interest rate risk; maturity risk premium (MRP); reinvestment rate risk Term structure of interest rates; yield curve “Normal” yield curve; inverted (“abnormal”) yield curve