BFN 110 Lecture Notes - Lecture 6: Overdraft, Floating Charge, Tunxis Community College
6 Jan 2021
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Explain the various types of debt securities. Debt is an amount of money borrowed today from a lender to be repaid in the future. It"s a contractual obligation which commits the borrower to interest and principal payments. Default if failure to meet the required payments when due. One of the risks associated sith debt finance. Interest rate: fixed, variable or a combination. Repayment pattern: interest only, principal and interest, capitalised. Securities with a term of less than 1 year. These instruments, issued in the money market, raise funds when they"re first issued. Purchaser is lender and issuer is borrower. Understand the parties to a bill of exchange. Specific charge over an asset mortgage over real property. Maintain certain ratios at a minimum or maximum. A bill must state: amount payable and date payable. Issued at a price less than their face value. Interest is difference between security"s price and face value.
