Often confused with maturity, duration is the weighted average maturity period of the cash flow or of any series of linked cash flows on a rate-sensitive instrument. It reflects t...
The discount yield – the term used by the US Treasury (USDT) for bank discount yield (BDY) – is the yield quoted on US T-bills on a simple interest basis (i.e., without compounding...
Convexity (γ) is a measure of the sensitivity and stability of duration over the yield curve, it describing the nonlinear price/yield relationship and accounts for the increasing s...
Common stock is the residual equity in a company in that all other financial claims against the firm have priority over this class of equity, it typically entitling its holders to...
Commercial paper (CP) is a negotiable, unsecured typically straight discount bearer money market instrument with a maturity of less than one year, usually issued by large nonbank c...
When several issues of debt securities (bonds and note) are outstanding, a hierarchy can be specified: Secured – The status of the claims of bondholders backed by specific assets o...
What is bond equivalent yield (BEY)?
The bond equivalent yield (BEY) is the total yield on investments that takes into account the interest applicable on bonds, which is the simple interest (uncompounded) semiannual b...
Securitization is the creation and issuance of marketable debt securities either through true-sale securitization or synthetic securitization. A true-sale securitization is the out...
An operating lease is a contractual arrangement in which the right to possess and use an asset is acquired for a period of time that is significantly shorter than the asset’s econo...
An ABCP conduit is the bankruptcy remote special purpose vehicle (SPV) that is set up and operated by the program’s sponsor to purchase the receivables and other financial assets (...
