Microsoft PowerPoint - PoF.ppt

Characteristicsƒ 103

Maturity (T):

date when (or time until) the bond expires

(or matures); maximum length of time the borrower has to pay off the principal in full.

ƒ

Bill / paper / short-term issues: T

≤

1y

ƒ

Notes / intermediate-term issues: 1y < T

≤

10y

ƒ

Bonds / long-term obligations: T > 10y

ƒ

Type of ownership

ƒ

Bearer bond

ƒ

Registered bond

Multi-period deterministic cash flows: FI securities - Introduction