An accommodation bill is a type of bill of exchange signed by an individual who acts as a guarantor, ensuring the bill’s payment in case the acceptor fails to pay at maturity. These bills are often called windbills or windmills.
A deferred interest bond is a type of bond that does not pay interest periodically like traditional bonds. Instead, it accrues interest, which is paid in a lump sum at maturity. An example of a deferred interest bond is a zero coupon bond.
A demand note is a financial instrument that is payable immediately upon the lender's request or on a specified date of maturity, without the necessity of further demand for payment.
An early-withdrawal penalty is a charge assessed against holders of fixed-term investments, such as certificates of deposit (CDs), when they withdraw their funds before the maturity date.
The effective interest rate is a key financial metric calculated from the purchase price of a debt instrument. It provides a more precise measure of the actual yield on a bond compared to the face interest rate or coupon rate.
A liquid instrument refers to a negotiable instrument that the purchaser can sell or trade before its maturity date, offering flexibility and quick access to funds.
Long-term debt, also known as long-term liability, refers to loans and financial obligations that are due in more than a year. These obligations often include bonds and notes payable, with periodic interest payments and the principal due upon maturity.
Maturity refers to the date at which legal rights in something ripen. In commercial contexts, such as negotiable instruments, it is the time when the paper becomes due and demandable. It also applies to character and emotional development in personnel management.
A bond with a maturity of 2 to 10 years, considered to be between short-term and long-term bonds in terms of maturity and risk.
A note or note payable is a written document that acknowledges a debt and contains a promise to pay a specified sum to a certain party by a certain date. Maturity terms can be definite or become definite over time.
A visual representation that plots the yields of bonds with varying maturities. It is an essential tool for understanding market sentiment and interest rate expectations.
