Upgrade to remove ads
Only $2.99/month

SIE Unit 2-5 Zero Coupon Bond LO2.e

KnopmanMarks
Get Quizlet's official SIE - 1 term, 1 practice question, 1 full practice test
Preview

Terms in this set (20)

Bonds
____________ are normally issued as an interest paying security.
Zero
_____________ coupon Bonds are an issuer's debt obligations that do not make regular interest payments
zeroes
zero coupon bonds are also called ____________
discount
Zeroes are issued or sold at a large ______________ and mature at par
return
The difference between the discount purchase price and the full face value at maturity is the ____________ the investor receives
accreted
The return on a zero coupon bond is also called the _________________ interest
inverse
The price of the zero coupon bond reflects general interest rate climate for similar maturities, going up and down in an _________________ relationship with interest rates.
volital
As the coupon rate is zero, these bonds are more __________________ than the other bonds with similar maturity
corporations
Zeroes are issued by 4 entities, 1 of 4 are C_______________
Municipalities
Zeroes are issued by 4 entities, 2 of 4, M_______________
Treasury
Zeroes are issued by 4 entities, 3 of 4, U.S. T______________
STRIPS
Treasury issued zereos are called _______________
Broker Dealers
Zeroes are issued by 4 entities, 4 of 4, may be created by ______________ __________________ from other types of securities.
Treasury Bonds
A more common form of BD created zeroes is built from a basket of ______ bonds
treasury receipts
These zeroes, issued by a BD and not the Treasury, are called treasury _____________
U.S.Treasury
Unlike a STRIP, a treasury receipt is not backed by the full faith and credit of the U.S.________________
Maturity
Zeroes interest payments are paid at ________________,
annually
Owners of zeroes will pay taxes on the interest _____________
remaining
The total interest payment is divided by the years ________________ to maturity, then the 1099 interest form will be sent to the owners
phantom income
The method of paying interest on zeroes is called, annual accretion of the discount or _________________ income
THIS SET IS OFTEN IN FOLDERS WITH...