Debt Flashcards
(2 cards)
1
Q
What is an OID?
A
Original Issue Discount (bond)
zero coupon bond, always sold at a discount, MUST accrete
2
Q
when do you need to accrete/amortize?
A
MUST accrete OIDs
-government taxes you every year
-may accrete bonds with a secondary market discount
-increases cost basis yearly
MUST amortize municipal bonds
do not amortize corporate or treasury bonds
