Definition of Bond Futures Bond futures are financial contracts that obligate the buyer to purchase a specific bond at a predetermined price on a specified date in the future. That means they are a type of derivative instrument that is based on the underlying bond. Bond futures are traded on […]
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Bond Fund
Definition of Bond Fund A bond fund is an investment fund that invests in bonds. That means it pools the money of many investors and invests it in a variety of bonds. These bonds can be government bonds, corporate bonds, or other types of bonds. Bond funds are usually managed […]
Read moreBond ETF
Definition of Bond ETF A Bond ETF (Exchange Traded Fund) is a type of investment fund that invests in a portfolio of bonds. That means it is a collection of bonds that are traded on a stock exchange. Bond ETFs are similar to mutual funds in that they provide investors […]
Read moreBond Equivalent Yield (BEY)
Definition of Bond Equivalent Yield (BEY) Bond Equivalent Yield (BEY) is a measure of the return on a bond or other fixed-income security. It is calculated by dividing the annual coupon payment by the bond’s purchase price. The BEY is expressed as a percentage and is used to compare the […]
Read moreBond Discount
Definition of Bond Discount A bond discount is the difference between the face value of a bond and its market price. That means it is the amount by which the market price of a bond is lower than its face value. Bond discounts are usually expressed as a percentage of […]
Read moreBuying Power
Definition of Buying Power Buying power is the amount of money a person or organization has available to purchase goods and services. That means it is the amount of money a person or organization can spend on goods and services without going into debt. It is usually measured in terms […]
Read moreCall Option
Definition of Call Option A call option is a financial contract that gives the buyer the right, but not the obligation, to buy a certain asset at a predetermined price (the strike price) within a certain period of time. That means the buyer of the call option has the right […]
Read moreCallable Bond
Definition of Callable Bond A callable bond is a type of bond that allows the issuer to redeem the bond before its maturity date. That means the issuer can buy back the bond from the bondholder at a predetermined price. This feature is usually included in the bond’s indenture and […]
Read moreAcceptable Quality Level (AQL)
Definition of Acceptable Quality Level Acceptable Quality Level (AQL) is a term that is commonly used in manufacturing and inspection industries. It refers to the maximum number of defective products that are considered acceptable in a batch or lot. That means AQL is a method for determining the quality of […]
Read moreAd Valorem Tax
Definition of Ad Valorem Tax An ad valorem tax is a form of taxation based on the assessed value of a product, service, or asset. The term originates from Latin, meaning “according to value.” In this tax system, the tax amount increases proportionally with the item’s value, resulting in higher […]
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