Binomial and Coupon: Difference between pages

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imported>Doug Williamson
(Align with Glossary and define 'binomial' on its own here, rather than 'binomial distribution'.)
 
imported>Doug Williamson
(Update first definition - source - Association of Corporate Treasurers - email from Naresh Aggarwal 16 Feb 2022.)
 
Line 1: Line 1:
Binomial models assume that there are only two possible outcomes, each time a trial is run.
1.  
For example, a fixed percentage jump up or jump down in a market price per short time interval.  


The periodic rate of interest paid on bonds and money market securities, stated as a percentage of the principal and usually paid out once or twice a year, depending on the terms of the issue.


A binomial tree or binomial lattice can then be built up from a series of binomial outcomes, to model market prices over longer time periods.


Similar modelling can also be applied to non-financial variables.
2.
 
Abbreviation for Coupon rate.




== See also ==
== See also ==
* [[Binary system]]
* [[Accrued interest ]]
* [[Binomial distribution]]
* [[Asset-based swap]]
* [[Binomial option pricing model]]
* [[Average effective maturity]]
* [[Binomial tree]]
* [[Average nominal maturity]]
* [[Boolean]]
* [[Bond]]
* [[Normal frequency distribution]]
* [[Coupon bond]]
* [[Coupon rate]]
* [[Coupon strip]]
* [[Dividend]]
* [[Foreign currency bond]]
* [[Interest]]
* [[Issue]]
* [[Money market]]
* [[Nominal value]]
* [[Nominal yield]]
* [[Paying agent]]
* [[Principal]]
* [[Security]]
* [[Zero coupon bond]]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Financial_products_and_markets]]

Revision as of 10:56, 16 February 2022

1.

The periodic rate of interest paid on bonds and money market securities, stated as a percentage of the principal and usually paid out once or twice a year, depending on the terms of the issue.


2.

Abbreviation for Coupon rate.


See also