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Contract Rate
The agreed-upon rate for financial transactions or payments defined in a contractual agreement.
Effective Interest Method
A method of computing the amortized cost of a bond and the interest expense over its life by applying a constant interest rate.
Bond Discounts
The variance between a bond's stated value and the amount it fetches on the market when it ends up selling for beneath that stated value.
Bond Premiums
The amount by which the market price of a bond exceeds its face value, typically due to interest rates being lower than the bond's coupon rate.
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