Home Wikituition Browse all terms Categories
Random term

Bonds & Fixed Income

5 terms

A–Z
All A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Filtering by: Bonds & Fixed Income Starts with D Clear all
Bonds & Fixed Income

Debenture

A debt instrument issued by a company, which in India may be secured against assets or unsecured.

Test: the instrument acknowledges a debt of the company and is issued under a debenture trust deed qualitative Bonds & Fixed Income

Default

A failure by a borrower to pay interest or principal when due, or a breach of another obligation under the debt agreement.

Test: a scheduled payment is missed beyond any grace period, or a covenant breach triggers an event of default qualitative Bonds & Fixed Income

Dirty Price

The total amount a buyer pays for a bond, including accrued interest since the last coupon.

Dirty Price = Clean Price + Accrued Interest ₹ Bonds & Fixed Income

Discount Bond

A bond trading below its face value, because its coupon is lower than the yield the market currently requires.

Test: Market Price < Face Value, which implies Yield to Maturity > Coupon Rate ₹ Bonds & Fixed Income

Duration

A measure of how sensitive a bond's price is to a change in interest rates.

Approximate Price Change % = -Modified Duration x Change in Yield in percentage points years