Meaning ACCRUED INTEREST: Applies mainly to convertible securities. Interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. At the time of sale, the buyer pays the seller the bond's price plus "accrued interest," calculated by multiplying the coupon rate by the fraction of the coupon period that has elapsed since the last payment. (If a bondholder receives $40 in coupon payments per bond semiannually and sells the bond one-quarter of the way into the coupon period, the buyer pays the seller $10 as the latter's proportion of interest earned.)
More terms such as Accrued interest in Dictionary A.
- Definition Accumulated Benefit Obligation (ABO):
- Examples An approximate measure of the liability of a pension plan in the event of a termination at the date the calculation is performed. Related: Projected benefit obligation accrued interest definition.
- Definition Arbitrage Bonds:
- Examples bonds issued intended to gain an interest rate advantage by refunding a higher-rate bond in ahead of their call date. Lower-rate refunding issue proceeds are invested in Treasuries until the first accrued interest explain.
- Definition Asset/Liability Management:
- Examples managing the funds of a financial institution to accomplish the two goals of a financial institution: (1) to earn an adequate return on funds invested and (2) to maintain a comfortable surplus of accrued interest what is.
- Definition Agency Cost View:
- Examples The argument that specifies that the various agency costs create a complex environment in which total agency costs are at a minimum with some, but less than 100%, debt financing accrued interest meaning.
- Definition Actual Market:
- Examples Used in context of general equities. Firm market. Antithesis of Subject market accrued interest abbreviation.
