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Consol or Perpetuity
a perpetual bond with no maturity date and no repayment of principal that periodically makes fixed coupon payments of $V forever
the coupon payment is so named because the bondholder used to obtain payment by clipping a coupon off the bond and sending it to the bond issuer, who then sent the payment to the holder.
dollar amount of the yearly coupon payment expressed as a percentage of the face value of the bond.
(zero-coupon bond) is bought at a price below its face value (at a discount), and the face value is repaid at the maturity date
loan where lender provides the borrower with an amount of funds, which must be repaid by making the same payment every period, consisting of part of the principal and interest for a set number of years
Present Value or Present Discounted Value
based on the common sense notion that a dollar paid to you one year from now has less value to you than a dollar paid to you today
Real Interest Rate
interest rate that is adjusted by subtracting expected changes in the price level(inflation) so that it more accurately reflects the true cost of borrowing
Return (Rate of Returns)
how well a person does by holding a bond or any other security over a particular time period
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