Series 52: Capital Appreciation Bond

Taken from our MSRB Municipal Securities Representative Qualification Examination

Definition of the term Capital Appreciation Bond...

a bond that is issued at a discount and does not pay interest during the life of the bond. It is distinguished from a zero coupon bond because rather than offer a discount from a simple interest rate that is accreted over the life of the bond, the discount for a capital appreciation bond is calculated using compound interest.

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Solomon Exam Prep Study Materials for the Series 52
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