Bond Terminology and Definitions
Free SOA Exam FM (Financial Mathematics) lesson in Bonds. 17 min read, ~2,524 words.
Basic price:. Coupon annuity plus bullet redemption. Premium/discount:. Premium when, discount when. Book value uses the original purchase yield with remaining periods. Market value uses the current market yield. Premium write-down:. Book value decreases toward; write-up has the opposite sign. Write-downs are geometric with ratio and sum to.
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 4a
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