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  • Lecture 1 (1) .11

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    A bond is a financial instrument that represents a claim on fixed future cash flows, including a typically large final payment at maturity called the par or face value, as well as possible smaller interim coupon payments. Coupons may occur zero, one or more times per year, with the bond maturing when the final cash flow is paid out.

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    Lecture 1(1).11

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    Lecture 1(1).11

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    A bond is a financial instrument that represents a claim on fixed future cash flows, including a typically large final payment at maturity called the par or face value, as well as possible smaller interim coupon payments. Coupons may occur zero, one or more times per year, with the bond maturing when the final cash flow is paid out.

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    10 views1 page

    Lecture 1 (1) .11

    Uploaded by

    kanye
    A bond is a financial instrument that represents a claim on fixed future cash flows, including a typically large final payment at maturity called the par or face value, as well as possible smaller interim coupon payments. Coupons may occur zero, one or more times per year, with the bond maturing when the final cash flow is paid out.

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    of 1

    What is a bond?

    A claim on some fixed future cash flow(s), CF.


    The bond matures at the time of its last cash
    flow, T.
    Typically a large cash flow at maturity. We
    call this the par value or face value (FV).
    There may be a series of smaller cash flows
    before maturity. We call these coupons.
    There may be zero, one or more coupons in a
    given year.

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