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Coupon (finance) In finance, a coupon is the interest payment received by a bondholder from the date of issuance until the date of maturity of a bond. [1] Coupons are normally described in terms of the "coupon rate", which is calculated by adding the sum of coupons paid per year and dividing it by the bond's face value. [2]
The assumption is that people who go through the trouble of collecting coupons have greater price sensitivity than those who do not. Thus, making coupons available enables, for instance, breakfast cereal makers to charge higher prices to price-insensitive customers, while still making some profit off customers who are more price-sensitive.
Duration (finance) In finance, the duration of a financial asset that consists of fixed cash flows, such as a bond, is the weighted average of the times until those fixed cash flows are received. When the price of an asset is considered as a function of yield, duration also measures the price sensitivity to yield, the rate of change of price ...
In finance, bootstrapping is a method for constructing a (zero-coupon) fixed-income yield curve from the prices of a set of coupon-bearing products, e.g. bonds and swaps. [ 1 ] A bootstrapped curve , correspondingly, is one where the prices of the instruments used as an input to the curve, will be an exact output , when these same instruments ...
10 year minus 2 year treasury yield. In finance, the yield curve is a graph which depicts how the yields on debt instruments – such as bonds – vary as a function of their years remaining to maturity. [1][2] Typically, the graph's horizontal or x-axis is a time line of months or years remaining to maturity, with the shortest maturity on the ...
A demand curve is a graph depicting the inverse demand function, [1] a relationship between the price of a certain commodity (the y -axis) and the quantity of that commodity that is demanded at that price (the x -axis). Demand curves can be used either for the price-quantity relationship for an individual consumer (an individual demand curve ...
Economics. An economic indicator is a statistic about an economic activity. Economic indicators allow analysis of economic performance and predictions of future performance. One application of economic indicators is the study of business cycles.
Econometrics is an application of statistical methods to economic data in order to give empirical content to economic relationships. [1] More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference."