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1. Good Morning 

2. BONDS TYPES OF BONDS CONSUMER LOAN BUSINESS LOAN AMORTIZATION MORTGAGE

3. BONDS

4. EXAMPLE

5. Example 1. How much an investor should be payed for a treasury bill he bought with an annual interest rate of 7.25% on a 180 days maturity date and the bills face value of 20,000? F = P

6. Exercise 1 ( 1 whole sheet of paper)

7. Mortgage A mortgage loan or mortgage is a loan secured for the purchase of a property but not until the full payment of the amortization on the loan. The lender has all the rights to take possession or sell the secured property (foreclosure or repression) to pay off the loan in the event the borrower defaults on the loan or fails to abide by its terms.

8. COUPON Periodic interest payment that the bondholder receives during the time between purchase date and maturity date; usually received semi-annually

9. Coupon Rate - the rate per coupon payment period; denoted by r Price of a Bond - the price of the bond at purchase time; denoted by P Par Value or Face Value - the amount payable on the maturity date; denoted by F. If P=F, the bond is purchased at par. If P<F, the bond is purchased at a discount If P>F, the bond is purchased at premium.

10. Te rm of a Bond - fixed period of time (in years) at which the bond is redeemable as stated in the bond certificate; number of years from time of purchase to maturity date. Fair Price of a Bond - present value of all cash inflows to the bondholder.