Bank Bill Swap Rate (BBSW)

• 30-year Treasury bonds are bonds issued by the US government with a maturity of 30 years.

• The highest possible rating a bond can receive is AAA, which is awarded only to those bonds that demonstrate the highest level of creditworthiness.

• Accrued interest is a characteristic of accrual accounting and follows revenue recognition guidelines and accounting matching principles.

• Federal government bonds and government-sponsored corporate bonds pay slightly higher interest rates than US Treasury bonds.

• An American option is a type of option contract that allows holders to exercise their rights at any time up to and including the expiration date.

• An amortizing bond is a type in which each payment goes towards both interest and principal.

• An asset swap is used to convert cash flow characteristics in order to hedge risks from one financial instrument with undesirable cash flow characteristics to another with favorable cash flow characteristics.

• A Convertible Asset Substitution Option Transaction, or ASCOT, is a way of separating the fixed income and equity components from a convertible bond.

A cession is a transfer of rights or property from one person to another.#

• Par value is the price at which the bond was issued, also known as its face value.

• In the money (ATM) are calls and puts where the exercise price is equal to or very close to the current market price of the underlying security.

• A baby bond is a bond with a par value of less than $1,000.

• Barrier options are a type of exotic option in which the payoff depends on whether the option reaches or exceeds a predetermined barrier price.

• A basis point is a standard measure of interest rates and other percentages in finance. – One basis point is equal to 1/100th of 1%, or 0.01% (and 0.0001 in decimal).

• Bear call spreads are formed by buying two call options, one long and one short, with different strike prices but the same expiration date.

• A bearish put spread is an option strategy implemented by a bearish investor who wants to maximize profits with minimal losses.

• A bear spread is a bear option strategy used when an investor expects a moderate decline in the price of the underlying asset.

• A bearer bond is a physical certificate with coupons attached that is used to pay off interest payments.

• The Bermuda option can be exercised early, but only on certain dates before its expiration date.

• A bid guarantee is a legal agreement that guarantees that contractors will fulfill their stated obligations for the project.

• Treasury bills are issued through an electronic bill auction held by the government every week.

• The binomial option pricing model values options using an iterative approach that uses multiple periods to price US options.

• The Black-Scholes Model, also known as the Black-Scholes-Merton Model (BSM), is a differential equation widely used to price option contracts.

• The Bond Agreement establishes certain actions to be taken or prohibited by the bond issuer.

• A bond discount is the amount by which the market price of a bond is below its principal amount due to be redeemed.