Personal Finance Vocab Section 11

Maturity Date

The date when a bond will be repaid

Face Value

The dollar amount the bond holder will receive at the bond's maturity

Debenture Bond

This is backed by the reputation of the corporation rather than by its assets

Mortgage Bond

A bond that is backed by assets of a corporation

Convertible Bond

A bond that an investor can trade for shares of the corporation's common stock

Sinking Fund

A fund in which a corporation makes deposits for the purpose of paying back a bond issue

Serial Bonds

Bonds issued at the same time, but maturity dates are on different dates

Registered Bond

A bond that is registered in the owners name by the company that issues it

Coupon Bond

A bond that is registered in the owners name for only the face value and not for interest

Bearer

Not registered in the investors name

Zero Coupon Bond

A bond that does not produce interest payments

Municipal Bond

Issued by the state or local government to pay for its on going activities

Investment-Grade Bonds

Bonds that are issued by financially stable companies or municipalities

Yield

The rate of return usually stated as a percentage earned by the investor who holds onto it until it matures

Closed-End Fund

A mutual fund with a fixed number of shares that are issued by an investment when the fund is first organized

Open-End Fund

A mutual fund with an unlimited number of shares that are issued and redeemed by an investment company at the investors request

Net Asset Value

The amount that one share of a mutual fund is worth

Load Fund

A mutual fund for which you pay a commission every time you buy or sell shares

No Load Fund

A mutual fund that has no commision fee