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Finance Glossary

Just call us Bond. Amortized bond.

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Amortized Bond

Definition:

See amortization. A bond comes due in 10 years. It has a coupon of 7%. Over the course of its life it will pay 10 x 7% x whatever the amount of issue of the bonds. Three years into the ten years, the bonds will produce less yield than they did on the date they were issued. One way of accounting for that differential is to think of bonds as a depreciating asset.

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