Bond Pricing

Effective Interest Rate
The effective interest rate is a key financial metric calculated from the purchase price of a debt instrument. It provides a more precise measure of the actual yield on a bond compared to the face interest rate or coupon rate.
Shallow Discount Bond
A bond issued in a primary market at a price exceeding 90% of its face value, meaning the discount does not surpass 10%. Such bonds are typically seen as less risky compared to more deeply discounted bonds.

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.