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2. Bootstrapping (finance) - Wikipedia

   en.wikipedia.org/wiki/Bootstrapping_(finance)

   Given: 0.5-year spot rate, Z1 = 4%, and 1-year spot rate, Z2 = 4.3% (we can get these rates from T-Bills which are zero-coupon); and the par rate on a 1.5-year semi-annual coupon bond, R3 = 4.5%. We then use these rates to calculate the 1.5 year spot rate. We solve the 1.5 year spot rate, Z3, by the formula below:

3. Zero-coupon bonds: What they are, pros and cons, tips to invest

   www.aol.com/finance/zero-coupon-bonds-pros-cons...

   Volatility and interest rate risk: Without regular interest payments to cushion price fluctuations, zero-coupon bonds are more volatile than short-term bonds. In general, the current value of any ...

4. Coupon (finance) - Wikipedia

   en.wikipedia.org/wiki/Coupon_(finance)

   Zero-coupon bonds are those that pay no coupons and thus have a coupon rate of 0%. [ 6 ] [ 7 ] Such bonds make only one payment: the payment of the face value on the maturity date. Normally, to compensate the bondholder for the time value of money , the price of a zero-coupon bond will always be less than its face value on any date of purchase ...

5. Zero-coupon bond - Wikipedia

   en.wikipedia.org/wiki/Zero-coupon_bond

   Zero coupon bonds have a duration equal to the bond's time to maturity, which makes them sensitive to any changes in the interest rates. Investment banks or dealers may separate coupons from the principal of coupon bonds, which is known as the residue, so that different investors may receive the principal and each of the coupon payments.

6. What Is a Zero-Coupon Bond? - AOL

   www.aol.com/zero-coupon-bond-173445378.html

   For example, if a zero-coupon bond with a $20,000 face value and a 20-year term pays 5.5% interest, the interest rate is knocked off the purchase price and the bond might sell for $7,000.

7. Mortgage-backed security - Wikipedia

   en.wikipedia.org/wiki/Mortgage-backed_security

   A mortgage-backed security (MBS) is a type of asset-backed security (an "instrument") which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment bank) that securitizes, or packages, the loans together into a security that investors can buy.