Intro. to Finance: Ch. 13 Investing in Bonds

Agency bond a bond issued by a federal agency
Callable bond a bond that can be paid off early
Convertible bond a corporate bond that can be exchanged for common stock
Debenture a corporate bond backed by the general creditworthiness of the company
Face value the amount the bondholder is paid at bond maturity
General obligation bond a bond backed by the power of a government unit to levy taxes to repay the debt
Municipal bond a bond issued by a state or local government
Revenue bond a municipal bond issued to raise money for a public-works project
Secured bond a bond that is backed by specific assets as collateral
Zero coupon bond a bond that is sold a t a deep discount, makes no interest payments, and is redeemable for its face value at maturity
Bond default when a bond issuer cannot meet the interest or principal payment on a bond
Bond fund a group of bonds that have been bundled together for investment purposes
Bond rating a category that tells an investor the risk assigned to a bond
Bond redemption when the bond is paid off at maturity by its issuer
Hedge any investment or action that helps offset against loss from another investment or action
Investment grade bond a bond that is considered of the highest quality
Junk bond a bond that has a low rating or no rating at all

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