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It is possible for companies to operate with negative cash balances on their books.
Premium
An amount paid in excess of the nominal or face value, often in relation to insurance policies, bonds, or shares.
Effective Interest Rate
The actual return on an investment, taking into account the effect of compounding interest as opposed to the nominal rate.
Contract Interest Rate
The interest rate specified in a loan agreement or contract, typically fixed for the life of the loan.
Face Value
The nominal value or dollar value of a security stated by the issuer, also known as par value, especially relevant for bonds and stock certificates.
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