List and Define the Eight Interrelated ERM Components

question 64

Essay

List and define the eight interrelated ERM components.

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Definitions:

Yield To Maturity

The total return expected on a bond if the bond is held until its maturity date, incorporating both interest payments and the capital gain or loss.

Discount

The reduction applied to the nominal or face value of something, typically used in the context of bonds or selling goods and services at below their listed prices.

Coupon Bond

A bond that pays the holder a fixed interest rate (the coupon) periodically until maturity, at which point the principal and final interest payment are made.

Par Value

Par value is the face value of a bond or stock as stated by the issuing company, which does not necessarily reflect its market value.