What Is Poulsen's Law

question 34

Short Answer

What is Poulsen's Law?

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Definitions:

Zero-Coupon Bond

A bond that does not pay interest during its life but is sold at a discount and pays its full face value at maturity.

Forward Rate

An interest rate applicable to a financial transaction that will take place in the future.

Yield To Maturity

The total return anticipated on a bond if held until it matures, considering all interest payments and the capital gain or loss.

Reinvestment Assumption

The assumption in financial planning or analysis that all cash flows or dividends will be reinvested to generate additional returns.