Credit rating agencyA credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may rate the creditworthiness of issuers of debt obligations, of debt instruments, and in some cases, of the servicers of the underlying debt, but not of individual consumers. Other forms of a rating agency include environmental, social and corporate governance (ESG) rating agencies and the Chinese Social Credit System.
Government bondA government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest, called coupon payments, and to repay the face value on the maturity date. For example, a bondholder invests 20,000,calledfacevalueorprincipal,intoa10−yeargovernmentbondwitha102000 in this case) each year and repay the $20,000 original face value at the date of maturity (i. Bootstrapping (finance)In finance, bootstrapping is a method for constructing a (zero-coupon) fixed-income yield curve from the prices of a set of coupon-bearing products, e.g. bonds and swaps. A bootstrapped curve, correspondingly, is one where the prices of the instruments used as an input to the curve, will be an exact output, when these same instruments are valued using this curve. Here, the term structure of spot returns is recovered from the bond yields by solving for them recursively, by forward substitution: this iterative process is called the bootstrap method.
Bond credit ratingIn investment, the bond credit rating represents the credit worthiness of corporate or government bonds. It is not the same as an individual's credit score. The ratings are published by credit rating agencies and used by investment professionals to assess the likelihood the debt will be repaid. Credit rating is a highly concentrated industry with the "Big Three" credit rating agencies – Fitch Ratings, Moody's and Standard & Poor's (S&P) – controlling approximately 95% of the ratings business.
Chemical bondA chemical bond is a lasting attraction between atoms or ions that enables the formation of molecules, crystals, and other structures. The bond may result from the electrostatic force between oppositely charged ions as in ionic bonds, or through the sharing of electrons as in covalent bonds. The strength of chemical bonds varies considerably; there are "strong bonds" or "primary bonds" such as covalent, ionic and metallic bonds, and "weak bonds" or "secondary bonds" such as dipole–dipole interactions, the London dispersion force, and hydrogen bonding.
Valuation of optionsIn finance, a price (premium) is paid or received for purchasing or selling options. This article discusses the calculation of this premium in general. For further detail, see: for discussion of the mathematics; Financial engineering for the implementation; as well as generally. This price can be split into two components: intrinsic value, and time value (also called "extrinsic value"). The intrinsic value is the difference between the underlying spot price and the strike price, to the extent that this is in favor of the option holder.
United States Treasury securityUnited States Treasury securities, also called Treasuries or Treasurys, are government debt instruments issued by the United States Department of the Treasury to finance government spending in addition to taxation. Since 2012, U.S. government debt has been managed by the Bureau of the Fiscal Service, succeeding the Bureau of the Public Debt. There are four types of marketable Treasury securities: Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation Protected Securities (TIPS).
Interest rate derivativeIn finance, an interest rate derivative (IRD) is a derivative whose payments are determined through calculation techniques where the underlying benchmark product is an interest rate, or set of different interest rates. There are a multitude of different interest rate indices that can be used in this definition. IRDs are popular with all financial market participants given the need for almost any area of finance to either hedge or speculate on the movement of interest rates.
High-yield debtIn finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events, but offer higher yields than investment-grade bonds in order to compensate for the increased risk. As indicated by their lower credit ratings, high-yield debt entails more risk to the investor compared to investment grade bonds.
Value investingValue investing is an investment that involves buying securities that appear underpriced by some form of fundamental analysis. The various forms of value investing derive from the investment philosophy first taught by Benjamin Graham and David Dodd at Columbia Business School in 1928, and subsequently developed in their 1934 text Security Analysis. The early value opportunities identified by Graham and Dodd included stock in public companies trading at discounts to book value or tangible book value, those with high dividend yields, and those having low price-to-earning multiples, or low price-to-book ratios.
Covalent bondA covalent bond is a chemical bond that involves the sharing of electrons to form electron pairs between atoms. These electron pairs are known as shared pairs or bonding pairs. The stable balance of attractive and repulsive forces between atoms, when they share electrons, is known as covalent bonding. For many molecules, the sharing of electrons allows each atom to attain the equivalent of a full valence shell, corresponding to a stable electronic configuration. In organic chemistry, covalent bonding is much more common than ionic bonding.
Hydrogen bondIn chemistry, a hydrogen bond (or H-bond) is a primarily electrostatic force of attraction between a hydrogen (H) atom which is covalently bound to a more electronegative "donor" atom or group (Dn), and another electronegative atom bearing a lone pair of electrons—the hydrogen bond acceptor (Ac). Such an interacting system is generally denoted , where the solid line denotes a polar covalent bond, and the dotted or dashed line indicates the hydrogen bond.
