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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Principal-Only

Definition:

Think of a bond as really being two parts - there is the principal from the bond which is due at some point in the future, almost like a zero coupon bond. Then there are the stream of coupon payments that happen monthly. Investors can strip out these two cash flows from bonds to suit their needs and then sell the bonds as principal-only.

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