Step-up (step down) notes, Financial Management

These types of securities have more than one coupon rate and each subsequent coupon rate is higher (or lower) than the previous coupon rate. For example, a 10 year step-up note (or step down note) might have a coupon rate that is 10% for the first five years and 11% (or 9%) for the last five years or, the step-up note (or step down note) could call for a 10% coupon rate for the first three years, 10.5% (or 9.5%) for the fourth and fifth year and 11% (or 9%) for the remaining five years. When there is only one change (or step up or step down) like the first example, then it is known as a single step-up note (or step down note). When there is more than one change then it is known as a multiple step-up note (or step down note) like the second example.  

Posted Date: 9/8/2012 5:05:20 AM | Location : United States







Related Discussions:- Step-up (step down) notes, Assignment Help, Ask Question on Step-up (step down) notes, Get Answer, Expert's Help, Step-up (step down) notes Discussions

Write discussion on Step-up (step down) notes
Your posts are moderated
Related Questions
Exam technique for analysing performance The below steps must be adopted when answering a question on analysing performance: Step 1    Review figures as they are and commen

1. Allocate resources to different departments by taking information from previous financial data. 2. What would be the estimated cost of new allotted resources to be included i

A computer products store stocks color graphics monitors, and the daily demand is normally distributed with a mean of 1.6 monitors and a standard deviation of 0.4 monitor. The lead

Bond Indenture An indenture builds the formal conditions of a lending relationship between a borrower and a lender. It is a written record, and it outlines most important func

Determine the steps for managing the funds For managing the funds first thing you would need is information. Externalinformation has to be collected from environment and accoun

Extendible reset bonds are floaters in which the issuer is required to reset the coupon rate so that the issue will trade at a predetermined price (usually above

Why is the coefficient of variation a better risk calculates to use than the standard deviation while evaluating the risk of capital budgeting projects? The coefficient of variat

Callable bonds give the right to the issuer to redeem the bond prior to its maturity date, at a specified call price. These bonds are beneficial to the

Which formula would you use to solve for the payment needed for a car loan if you know the interest rate, length of the loan, and the borrowed amount?  Describe. To solve for k

Create contingency plans for the following scenarios: • One of your highly qualified consultants has given three months notice and is planning to move to a competitor after this ti