Bonds & Fixed Income
3 terms
Inflation-Indexed Bond
Bonds & Fixed Income
₹
A bond whose principal is adjusted for inflation, so both the coupon and the redemption amount rise with prices.
Adjusted Principal = Original Principal x (Current Index Value / Index Value at Issue); Coupon = Adjusted Principal x Real Coupon Rate
Inverted Yield Curve
Bonds & Fixed Income
%
A yield curve on which short-maturity yields exceed long-maturity yields.
Test: yield on a short maturity, such as two years, exceeds the yield on a longer one, such as ten years
Investment Grade
Bonds & Fixed Income
qualitative
A credit rating of BBB minus or above, indicating relatively low expected default risk.
Test: the rating is BBB- or higher on the standard scale