Interest rate risk
The chance a bond's price falls because rates rose.
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Words beside it
- Accrued interest
Interest a bond has earned since its last payment; a buyer pays it to the seller on top of the price.
- Burn rate
Cash leaving a business each month net of cash coming in.
- Cap rate
A rental property's yearly net operating income divided by its price. A quick measure of return before borrowing.
- Compound annual growth rate (CAGR)
The steady yearly rate that would turn a starting value into an ending value over a period.
- compound interest
When the money you earn from savings or investments starts earning its own money on top of itself over time. The longer you leave it alone the faster it tends to grow.
- corporate bond
A loan you give directly to a company instead of a government, and the company promises to pay you back with interest over a set period of time.
- coupon rate
A coupon rate is the percentage of interest a bond pays you each year based on its face value. For example if a bond has a face value of one thousand dollars and a coupon rate of five percent, you receive fifty dollars per year in interest payments.
- credit risk
Credit risk is the chance that the person or organization you lent money to will not pay you back as promised. A higher credit risk means there is a greater possibility of losing some or all of your money.
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