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Fixed Income Securities
What is a fixed income security?
A fixed income security is a debt instrument that pays the holder a fixed series of cash flows (coupon payments) at predetermined intervals and returns the principal at maturity.
What is a coupon bond and how does it differ from a zero-coupon bond?
Coupon bond pays periodic interest; zero-coupon is issued at discount.
What is the face value (par value) of a bond?
Face value is the nominal or principal amount of a bond on which coupon interest is calculated and which is repaid to the bondholder at maturity.
What is the price-yield relationship in fixed income securities?
Bond price and yield move inversely to each other always.
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