In finance, a bond is an instrument of indebtedness of the bond issuer to the holders. The most common types of bonds include municipal bonds and corporate bonds. The bond is a debt security, under which the issuer owes the holders a debt and (depending on the terms of the bond) is obliged to pay them interest (the coupon) or to repay the principal at a later date, termed the maturity date. Interest is usually payable at fixed intervals (semiannual, annual, sometimes monthly). Very often the bond is negotiable, that is, the ownership of the instrument can be transferred in the secondary market. This means that once the transfer agents at the bank medallion stamp the bond, it is highly liquid on the secondary market.
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages the term “security” is commonly used in day-to-day parlance to mean any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equities and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants. Continue reading “Security (Ofer Abarbanel Online Library)”
A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs. The loss may be complete or partial. In an efficient market, higher levels of credit risk will be associated with higher borrowing costs. Because of this, measures of borrowing costs such as yield spreads can be used to infer credit risk levels based on assessments by market participants. Continue reading “What is Credit Risk? (Ofer Abarbanel online library)”
A Pell Grant is a subsidy the U.S. federal government provides for students who need it to pay for college. Federal Pell Grants are limited to students with financial need, who have not earned their first bachelor’s degree, or who are enrolled in certain post-baccalaureate programs, through participating institutions. The Pell Grant is named after Democratic U.S. Senator Claiborne Pell of Rhode Island, and was originally known as the Basic Educational Opportunity Grant. A Pell Grant is generally considered the foundation of a student’s financial aid package, to which other forms of aid are added. The Federal Pell Grant program is administered by the United States Department of Education, which determines the student’s financial need and through it, the student’s Pell eligibility. The U.S. Department of Education uses a standard formula to evaluate financial information reported on the Free Application for Federal Student Aid (FAFSA) for determining the student’s expected family contribution (EFC). Continue reading “Pell Grant (Ofer Abarbanel online library)”
A loan is a type of debt. The borrower needs to repay the lender the sum of money loaned part by part over time in order to clear the debt.
Acting as a provider of loans is one of the main tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a main source of funding. Bank loans and credit are one way to increase the money supply.
Important components of a loan
A loan can be broadly described by the following terms.
Deposit or Down-payment
The deposit or down-payment is an amount of money that the borrower is required to pay, as the first contribution towards clearing the debt, so that the loan deal can be finalized. The deposit is usually higher than the monthly contribution towards the loan. Some loans require a deposit while some do not. The deposit is usually a fraction, typically a percentage, of the total amount that is loaned out. Continue reading “Types of Loans (Ofer Abarbanel online library)”
The available evidence points to the fact that the $400 billion credit line between Iran and China has gone into operation, Chairwoman of the Money and Capital Market Commission of Tehran’s Chamber of Commerce Farial Mostofi said on Tuesday.
She added that the credit line has allowed Chinese investors to undertake projects in Iran without bidding.
On the French proposal for a $15 billion credit line for oil purchases from Iran, Mostofi said the plan will grind to a halt if the US refuses to authorize France to implement the credit line.
The chairwoman suggested that France could still create the $15 billion credit line between the central banks of the two countries should the US refuse permission for the plan.
Oil Minister Bijan Namdar Zanganeh, though, believes that Iran will go into debt if it receives the $15 billion credit, she added.
Paris has put forward a $15 billion credit line for oil purchases from Iran until year-end in order to convince Tehran not to take the next step in reducing commitments under the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA).
French Foreign Minister Jean-Yves Le Drian says talks on the credit arrangement, which would be guaranteed by Iranian oil revenues, are in progress, but approval from the US would be crucial.
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral, while an unsecured loan doesn’t have collateral.
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent. Continue reading “Secured Loan (Ofer Abarbanel online library)”