Government bonds Flashcards
1
Q
Government bonds
A
fixed interest securities
2
Q
coupon
A
fixed annual interest on a bond
3
Q
yield on a bond
A
effectively the interest rate on a bond. the yield will vary inversely with the market price of a bond
4
Q
coupon rate
A
the total sum of annual coupons divided by the initial price of the bond
5
Q
equation for yield
A
(interest on bond/market price) x 100
6
Q
equation for market price of a gov bond
A
(coupon/yield) x 100
