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Premium

For a stock, a premium is the amount for which it sells above its intrinsic value.

In the world of finance, there exists a concept known as "premium." This term represents the additional amount of money that an investor is willing to pay in order to acquire a particular asset. Specifically, in the case of bonds, a premium is the price that exceeds the bond's par value. On the other hand, when it comes to stocks, a premium reflects the price that surpasses the stock's intrinsic value.

Junk bond

A high yield bond, also known as a junk bond, is a type of bond that offers a higher rate of return due to its higher level of credit risk. This means that the issuer of the...

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Capital Budgeting

Investment in fixed-assets requires careful consideration of various factors that affect the decision-making process. This includes assessing the potential cash flows that w...

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Sinking Fund

In the world of finance, there exists a concept known as a bond indenture. This refers to an agreement between a borrower and a lender, outlining the terms and conditions of...

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Settlement Risk

Counterparty risk is a term used in finance to describe the potential for a party to fail to meet their financial obligations. This can occur in a variety of situations, suc...

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