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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.

Coupon Interest Rate

Bond interest, also known as coupon rate, is the annual percentage that the issuer of a bond is obligated to pay to the bondholder. This rate is determined and agreed upon i...

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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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Liquidity

Liquidity is a crucial concept in finance, as it measures an investor's ability to quickly turn an asset into cash. This is essential, as the faster the conversion, the more...

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Prepayment

Early payment of a debt is known as prepayment. It means paying off a loan or debt before the agreed-upon due date. This can happen for various reasons, such as wanting to a...

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