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Inflation Premium
The additional interest rate that lenders charge borrowers to compensate for the loss of purchasing power due to inflation.
Short-Term Bond
A bond that matures in a short period, usually less than five years, making it less sensitive to interest rate changes compared to long-term bonds.
Default Risk Premium
The additional return that investors require to compensate them for the risk of default by the borrower.
Par Value
The face value of a bond or stock, representing the amount that the issuer agrees to pay at maturity or the base value of a stock set by the issuing company.
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