NISM Series XV : Research Analyst Certification Exam Notes
Page 26 Of 62
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Investors who wish to invest only for dividends and capital appreciation and are not really bothered about voting rights find these shares attractive.
Coupon Rate - Interest paid on the bond/debt security is known as Coupon rate, expressed as a percentage of its face value. The actual amount of money which the investor receives as interest is equal to the product of the face value and the coupon rate
Maturity - Every loan will have a tenure. This is known as 'tenor' or 'maturity' or 'term to maturity' in bond markets
Principal - This is the amount of borrowing of the issuer represented by the security. This is the initial investment which an investor makes when the bond is issued and is represented by face value.On redemption, this entire principal is returned to the investor.
Holding Period Returns (HPR) - is the return earned on an investment during a specific period when it was bought and held by the investor. An investor may purchase the bond from the issuer directly when it is issued, or may purchase at any later date from the secondary market. Similarly, the investor may hold the bond till maturity or may exit earlier in between by selling on the secondary market. The returns to the investor for the period for which the bond was held is known as HPR.
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