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Briefly Compare and Contrast Options and Futures

question 49

Essay

Briefly compare and contrast options and futures.


Definitions:

Coupon Rate

The interest rate stated on a bond or other fixed-income security, expressed as a percentage of its face value.

Issued At 98

A term indicating that a bond or other security was issued at a price below its par or face value, in this case, at 98% of the face value.

Book Value

The net value of a company's assets as recorded on the balance sheet, calculated by subtracting liabilities from the total assets.

Bond Retirement

The process by which an issuer fulfills its obligational repayment of the principal amount of a bond before its maturity date.

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