Bond Terminology and Definitions
Free SOA Exam FM (Financial Mathematics) lesson in Bonds. 14 min read, ~2,060 words.
Basic price:. Coupon annuity + bullet redemption. Premium/discount:. Premium when. Book value uses the original purchase yield. Market value uses the current market yield. Premium write-down:. Book value decreases toward. Reinvestment risk: accumulated value uses at reinvestment rate, not yield.
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 4a
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