Acronyms
ETF
What is an Exchange traded fund
Annual income divided by the current market value
what is the Current yield
New laws reduce the value of a security, like increasing tax rates on interest received from debt investments
What is legislative risk
This issue has a maturity no greater than 270 days
What is commercial paper
Annual income divided by par
what is the nominal yield
TIPS
what is a Treasury Inflation Protection Security
Long-term, investment grade debt securities are rated AAA, AA, A, BBB by this agency
what is Standard & Poor's
High coupon rate bonds and low call premium bonds are most susceptible to this risk
What is call risk
What is subordinated debenture
Net overall debt divided by the population
what is debt per capita
TRAN
what is a Tax and revenue anticipation note
This bond is the most volatile
what is a Zero coupon bond
This type of risk is non-existent in Treasury bonds but a major concern in the municipal bond market
What is marketability risk
This issue is backed by real estate owned by the corporation
What is a mortgage bond
Annual income plus annualized capital gain divided by the average of purchase and call prices
what is yield to call
TRACE
what is Trade Reporting and Compliance Engine
The curve indicating to investors a recession is coming
what is the Inverted Yield Curve
Mortgage pools are susceptible to two types of risk: extension risk and this
What is prepayment risk
After bankruptcy, a company may issue these, which trade flat
What is an income bond
What is an adjustment bond
what is yield to maturity
FHLMC
what is the Federal Home Loan Mortgage Corporation
First there was the Treasury Receipt. Now, there's this
what are STRIPS
Risk for long-term investors that market rates fall over the issue's time horizon; zero coupons avoid it
What is reinvestment risk
These issues are backed by the corporation's full faith and credit, not collateral
What are unsecured
What is unsecured
Par value divided by the conversion price
what is the conversion ratio