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Series 6
Series 6
128
Finance
Graduate
05/29/2010
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Term
SALE OR SALE
 Definition
THE TERM SALE OR SELL SHALL INCLUDE EVERY CONTRACT OF SALE OR DISPOSITION OF A SECURITY OR INTEREST IN A SECURITY, FOR VAULE
Term
ISSUER
 Definition
EVERY PERSON WHO ISSUES OR PROPOSES TO ISSUE ANY SECURITY
Term
"OFFER TO SELL" "OFFER FOR SALE" OR "OFFER"
 Definition
EVERY ATTEMPT OR OFFER TO DISPOSE OF OR SOLICITATION OF AN OFFER TO BUY A SECURITY OR INTEREST IN A SECURITY FOR VALUE.
Term
UNDERWRITER
 Definition
ANY PERSON WHO HAS PURCHASED FROM AN ISSUER WITH A VIEW TO OR OFFERS OR SELLS FOR AN ISSUER IN CONNECTION WITH , THE DISTRIBUTION OF ANY SECURITY OR PARTICIPATES OR HAS A DIRECT OR INDIRECT PARTICIPATION IN ANY SUCH UNDERTAKING OR PARTICIPATES OR HAS A PARTICIPATION IN THE DIRECT OR INDIRECT UNDERWRITING OF ANY SUCH UNDERTAKING.
Term
NOT SECURITIES
 Definition
-FIXED ANNUITIES
-WHOLE LIFE, TERM LIFE
-BANK CDs INSURED BY THE FDIC
-COMMODITIES FUTURES CONTRACTS
Term
WHO ESTABLISHED THE SEC?
 Definition
THE SECURITIES EXCHANGE ACT OF 1934
Term
WHAT WOULD LEAD YOU TO A STATUTORY DISQUALIFICATION?
 Definition
ANY FELONY OR SECURITIES RELATED MISDEMEANOR IN THE PAST 10 YEARS.
Term
SECURITIES RELATED MISDEMEANOR
 Definition
MISHANDLING MONEY OF CUSTOMER RELATIONS:FORGERY, BRIBERY,PERJURY,EMBEZZLEMENT, COUNTERFEITING,EXTORTION,FRAUD ETC
Term
RULE 17F-2 OF THE SECURITIES EXCHANGE ACT OF 1934
 Definition
REQUIRES OFFICERS AND CERTAIN EMPLOYEES OF MEMBER FIRMS TO SUBMIT FINGERPRINTS
Term
Specialist
 Definition
There is usually one specialist per stock who stands ready to step in and buy or sell as many shares as needed to ensure a fair and orderly market in that security.
Term
What are the five primary regional exchanges?
 Definition
1. Boston Stock Exchange
2. Chicago Stock Exchange
3. Cincinnati Stock Exchange
4. Pacific Stock Exchange
5. Philadelphia Stock Exchange
Term
The two type of floor broker?
 Definition
commission brokers and two-dollar brokers.
Term
Commission brokers
 Definition
work for a particular member firm
Term
Two-dollar brokers
 Definition
independent brokers who execute orders for firms that do not have their own full-time commission brokers.
Term
all municipal bonds and U.S. government securities trade
 Definition
on the OTC market
Term
The secondary market
 Definition
also known as the aftermarket, is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold
Term
primary market
 Definition
is where new issues are sold
Term
Market Makers
 Definition
are OTC dealers who buy and sell a minimum number of shares of a specific security at a quoted price.
Term
market maker acts
 Definition
more like a depository and distribution source for securities, absorbing excess stock when demand is low and providing the stock when demand is high. As a result, he or she bears the burden of risk, but also buys and sells for his or her own profit.
Term
The primary source of the market maker's profits , which is the difference between the bid price at which the market maker is willing to buy a security and the ask price at which he or she will sell the security is called what
 Definition
the spread
Term
what is the Nasdaq
 Definition
It is essentially a computer system run by FINRA that provides member firms with quotations for over 5,000 OTC securities. Given the fact that more shares trade daily on it than on any of the exchanges, the Nasdaq represents the largest securities market in the U.S.
Term
Types of Issues in the Nasdaq
 Definition
Nasdaq National Market securities and
Nasdaq Small Cap securities
Term
The Nasdaq system provides three levels of stock quotation service called what
 Definition
Levels I, II and III
Term
Level 1 in the Nasdaq
 Definition
is available to registered representatives. It displays the inside market only - that is, the best (highest) bids and the best (lowest) asks for securities in the system. Level I prices are not guaranteed, as the market fluctuates too rapidly for a firm quote.
Term
Level 2 in the Nasdaq
 Definition
Level II is available to FINRA approved subscribers only. It provides the current quote and quote size available from each market maker in a security. A market maker must guarantee a firm quote for at least 100 shares in a security in order to list a quote on the system.
Term
Level 3 in the Nasdaq
 Definition
provides subscribers with all of the services of Levels I and II. In addition, Level III allows market makers to update, change or delete their quotes and size of quotes on any security in which they make a market. Level III is the only level that allows quote inputs.
Term
A broker-dealer
 Definition
is a person or firm that is in the business of buying and selling securities.
Term
Agent/Broker role
 Definition
the firm acts as a matchmaker, essentially never owning the security but, instead, finding a suitable buyer or seller on the OTC market or executing the transaction for the customer on one of the exchanges.
Term
Principal/Dealer
 Definition
In the second role, the firm acts as principal, or dealer, and buys or sells the security for itself, assuming actual ownership and, therefore, taking on more risk.
Term
Firm Commitment
 Definition
The underwriter agrees to buy securities from the issuing corporation and pay the proceeds to the company.
Term
Best Efforts underwriting
 Definition
Best effortsunderwriting allows the firm (or underwriting syndicate) to act as agent for the issuing corporation and limits the responsibility of that firm to the shares it is able to sell. All unsold shares are absorbed by the issuer.
Term
All or none underwriting
 Definition
allows the issuing corporation to contract for the sale of all shares. If any shares remain at the end of the underwriting process, the underwriting is cancelled. Underwriters cannot deceive investors by stating that all of the securities in the underwriting have been sold if it is not true.
Term
Standby underwriting
 Definition
allows an underwriting firm (or syndicate) to wait in the wings in an additional offering for any unused pre-emptive rights that are not executed by the company's current shareholders. The underwriter will purchase the unused rights, exercise them and sell the shares.
Term
Underwriter
 Definition
A company or other entity that administers the public issuance and distribution of securities from a corporation or other issuing body. An underwriter works closely with the issuing body to determine the offering price of the securities, buys them from the issuer and sells them to investors via the underwriter's distribution network.
Term
Trade date
 Definition
The trade date for the purchase or sale of a security is the date on which the transaction is executed.
Term
Settlement Date
 Definition
The settlement date is the date on which the transaction must be completed, or the date on which the buyer pays for the securities and the seller delivers them.
Term
Regular-way settlement
 Definition
corporate stocks and bonds and municipal securities is three days after the trade date (T+3). For Treasury securities and options, settlement is T+1, or one day after the transaction. Cash transactions settle on the same day as the trade date.
Term
Ex-dividend
 Definition
the ex-dividend date will always be two days prior to the stock's record date.
Term
Record Date
 Definition
When a board of directors announces a dividend payment, it will specify the date by which an investor must own the stock and be registered on the company's records as a shareholder in order to receive the dividend
Term
Payment Date
 Definition
The date the dividend is actually paid out to the shareholders.
Term
Market Value
 Definition
The current bid and ask prices for a security.
Term
bid
 Definition
The price a market maker will pay for a security; it's the price an investor would receive if he or she sold the security.
Term
Asked or Offering:
 Definition
the price an investor would pay when buying the security.
Term
Net Asset Value (NAV)
 Definition
Refers to pricing of a mutual fund. It equals the total value of the fund's portfolio less liabilities and is calculated daily.
Term
Price at which the security was originally issued - used most often when referring to bond prices. See section below for more complete information.
 Definition
Par Value
Term
This is simply the yield stated on the bond's coupon. If the coupon is paying 5%, then the bondholder receives 5%.
 Definition
Nominal Yield
Term
Current Yield
 Definition
Current Yield = Annual Interest Payment divided Market Price
Term
Yield To Maturity - YTM
 Definition
The rate of return anticipated on a bond if it is held until the maturity date. YTM is considered a long-term bond yield expressed as an annual rate. The calculation of YTM takes into account the current market price, par value, coupon interest rate and time to maturity. It is also assumed that all coupons are reinvested at the same rate. Sometimes this is simply referred to as "yield" for short.
Term
Duration
 Definition
# The longer the duration of a particular bond, the more its price will fluctuate in response to interest rate changes.
# Duration is always equal to or less than the years to maturity of the bond.
# Duration can help to calculate the impact of interest rate changes on the price of the bond. For example, a bond with a duration of eight is likely to decrease 8% for every 100 basis points increase in market interest rates.
# Duration is a weighted average term to maturity.
# As payment frequency increases, duration decreases
Term
Long sale
 Definition
# Investors with this position believe that the price of the stock will rise, and expects to profit in the future by selling their stock.
Term
Short Sale
 Definition
Investor expects the price of a stock to fall.
At a later date, the investor plans to buy the stock back at a much lower price to replace the borrowed shares (known as closing the short position) while making a profit - that is, the difference between the original sale price of the borrowed shares and the value of the stock purchased back at a lower price.
Term
Market Order or unrestricted order
 Definition
Market orders are the most common types of orders. The order merely instructs the broker to buy or sell a stock at whatever price is available when the order reaches the floor of the exchange. While the customer will not know the price at which the stock was bought or sold until the order is completed, a market order will always be executed.
Term
Market orders are the most common types of orders. The order merely instructs the broker to buy or sell a stock at whatever price is available when the order reaches the floor of the exchange. While the customer will not know the price at which the stock was bought or sold until the order is completed, a market order will always be executed.
 Definition
Market Order or unrestricted order
Term
limit order
 Definition
A limit order is executed at a specified price or better. A buy limit order is executed at the order price or lower, while a sell limit order is filled at the specific limit price or higher. Unlike a market order, a limit order might not be executed if the price never reaches the specified limit price.
Term
Stop orders
 Definition
Stop Orders: A stop order becomes a market order to buy or sell a security once the stock reaches a certain price, called the stop price. Again, as with the market order, there is no price guarantee, but the investor order will be executed once the stop is activated.
Term
A stop order
 Definition
An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
Term
It is assumed that every order is a day order, which means the order is cancelled at the end of the trading day if it has not been executed.
 Definition
Day Order
Term
This type of order remains in place until it is executed or cancelled by the customer.
 Definition
Good Till Canceled (GTC) Orders:
Term
At the Open and Market on Close Orders
 Definition
These orders are confirmed at the opening of trading on the day following the day on which the order was placed or as close as possible to the close of trading on the order date.
Term
Not Held (NH) Orders
 Definition
In an NH order, the floor broker has discretion on price and timing of trade execution.
Term
Fill or Kill (FOK) Orders
 Definition
The order is either executed immediately in full or killed.
Term
Immediate or Cancel Orders
 Definition
The order is executed immediately in full or in part, and any part of the order that remains unfilled is cancelled.
Term
All-or-None Orders
 Definition
The order is executed in full, but not necessarily immediately.
Term
Firm Quotes
 Definition
All quotes are firm quotes unless otherwise indicated. A firm quote is the price at which a broker-dealer or market maker will buy or sell at least one trading unit of stocks (100 shares) or bonds (five bonds) at the quoted price. For instance, a firm market for a stock sounds like, "The market is 54-55", or "It is 14-14 ½". If the market maker refuses to do business at the firmly quoted price after the fact, his or her action is called backing away. Backing away is against FINRA trading rules.
Term
Subject Quotes
 Definition
A subject quote is given when the price is tentative, subject to the market maker's reconfirmation. The market maker may state, "It's 20 to 22, work out", or "The price is around 78-78 ¾".
Term
Qualified Quotes
 Definition
Contrary to firm quotes, qualified quotes allow the broker-dealer to back away from the quote if market conditions change in the security. Two types of qualified quotes are recognized: workout quotes and nominal quotes.
Term
workout quotes
 Definition
Workout quotes are common in institutional block trades, characterized by trading in units of 10,000 or more shares of a security
Term
Nominal quotes
 Definition
the interest rate paid by a bond or preferred stock, the investor receives this % of the par value each year,regardless of what the bond or preferred stock is trading for on the secondary market.
Term
Individual Accounts
 Definition
An individual account has one beneficial owner, who is the only person who can control investments within the account and request distributions or cash or securities from the account.
Term
Joint Accounts
 Definition
Two or more adults may act as co-owners of a joint account, with each allowed some form of control over the account. Joint accounts may be designated as Tenants in Common (TIC), Joint Tenants with Right of Survivorship (JTWROS) or Tenants by Entirety (TBE).
Term
Tenants In Common - TIC
 Definition
When a property is owned by two or more tenants. If one owner dies, the other does not automatically take the entire estate.
Term
Joint Tenants with Right of Survivorship (JTWROS)
 Definition
A type of brokerage account which is owned by at least two people, where all tenants have an equal right to the account's assets and are afforded survivorship rights in the event of the death of another account holder.
Term
Tenants by Entirety (TBE)
 Definition
Tenants by Entirety accounts may only be established by married couples. When one spouse dies, the surviving spouse simply retains ownership of the account.
Term
The three basic types of investment securities
 Definition
money market, debt (bonds) and equities (stock).
Term
Fiscal Policy?
 Definition
the means by which a government adjusts its levels of spending in order to monitor and influence a nation's economy.
Term
Money market fund
 Definition
Money market funds invest in short-term debt instruments of one year or less. Investors can withdraw money at any time with almost no risk of loss of principal.
Term
Bond funds
 Definition
As the name suggests, bond funds are mutual funds that invest solely in bonds.
Term
Government Bond Funds
 Definition
Government bond funds invest in Treasury securities, agency securities like Freddie Mac or Ginnie Mae, and cash and equivalents.
Term
Municipal Bond Funds
 Definition
Municipal bond funds consist exclusively of municipal bonds.
Term
Corporate Bond Funds
 Definition
Corporate bond funds invest in bonds issued by numerous corporations.
Term
High-Yield Bond Funds
 Definition
High-yield bond funds invest in bonds that are rated below investment grade by Standard & Poor's or Moody's (i.e. junk bonds), as discussed in the Securities Market section.
Term
Balanced Funds
 Definition
Balanced funds divide their assets between stocks and bonds. The proportions of each investment vehicle will vary with market conditions and decisions made by the portfolio manager. Balanced funds tend to be less volatile than funds that invest only in stocks. Usually, the goal of a balanced fund is to even out market advances and declines.
Term
A corporate bond
 Definition
A corporate bond is a contract between a corporation and the investor, whereby the investor lends the corporation money, in return for a legal promise that the corporation will pay the principal back to the investor on a specified date, with interest.
Term
Indenture
 Definition
A contract between an issuer of bonds and the bondholder stating the time period before repayment, amount of interest paid, if the bond is convertible (and if so, at what price or what ratio), if the bond is callable and the amount of money that is to be repaid.

The indenture is another name for the bond contract terms, which are also referred to as a deed of trust.
Term
Secured Debt
 Definition
Secured bonds are backed by assets owned by the issuing corporation. If the secured debt, corporation goes bankrupt, the trustee will take possession of the assets and liquidate them on the bondholders' behalf. If the company defaults on its bond payments, there is still the protection of income from the sale of the company's assets, which secure the payments.
Term
Mortgage bonds
 Definition
Mortgage bonds are secured by a first or second mortgage on real property.
Term
Equipment trust certificates
 Definition
Equipment trust certificates are secured by a specific piece of equipment.
Term
Collateral trust bonds
 Definition
Collateral trust bonds are secured by the securities of another corporation, which is usually affiliated with the issuer in some way.
Term
Unsecured Debt
 Definition
Unsecured bonds, also known as debentures, are secured only by the corporation's good faith and credit, and not by a specific asset.
Term
High-Yield (Junk) Bonds
 Definition
Unsecured corporate bonds that are not considered investment grade by credit rating companies - those rated BBB or below by Standard & Poor's (S&P) or Baa or below by Moody's, for example - are called high-yield bonds, or junk bonds
Term
Convertible Bonds
 Definition
A corporation may issue convertible bonds, which allow investors to convert a bond into shares of the company's common stock at a predetermined ratio. A corporation will issue these bonds to borrow money at a lower rate of interest than the company would pay on an equivalent non-convertible bond issue. The assumption is that investors will forgo a bit of interest on exchange for the conversion feature.
Term
Cconversion ratio=
 Definition
par value divided by Conversion price
Term
Conversion price
 Definition
Conversion price is the price per share at which the corporation will sell the bondholder the stock in exchange for the bond.
Term
The conversion ratio
 Definition
The conversion ratio is the par value of the bond divided by the conversion price, and it gives you the number of shares received for each bond.
Term
Parity
 Definition
When the market price of the stock equals the conversion price of the stock, the situation is called parity.
Term
Money Market
 Definition
Money market securities are debt issues with maturities of one year or less
Term
T-bills
 Definition
T-bills are short-term securities that mature in one year or less from their issue date.
Term
The capital market
 Definition
The capital market is a source of intermediate-term to long-term financing in the form of equity or debt securities with maturities of more than one year.
Term
Three important characteristics of money market
 Definition
Liquidity, safety and Discount Pricing * Safety - They also provide a relatively high degree of safety because their issuers have the highest credit ratings. * Discount Pricing- A third characteristic they have in common is that they are issued at adiscount to their face value.
Term
Money market securities issued by the U.S. government and its agencies include the following vehicles:
 Definition
* Treasury bills (T-bills) * Treasury and agency securities with remaining maturities of less than a year * Federal National Mortgage Association (Fannie Mae) short-term discount notes * Federal Home Loan Bank short-term discount notes and interest-bearing notes * Federal Farm Credit Bank notes and bonds maturing in one year * Short-term discount notes issued by other smaller agencies
Term
CLN
 Definition
Construction loan notes (CLNs) A short-term obligation in the form of a note, used for the funding of construction projects such as housing developments.
Term
Revenue anticipation notes (RANs)
 Definition

  • RANs are generally used to generate immediate investment capital to begin a large project. These securities are repaid with future expected revenues from the completed project, which may come from sources like turnpike tolls or stadium ticket sales.

    • Term
    Bond anticipation notes (BANs)
    		 Definition

    Bond anticipation notes (BANs)

    • A short-term interest-bearing security issued in the anticipation of larger future bond issues.
    Term
    Tax anticipation notes (TANs)
    		 Definition

    Tax anticipation notes (TANs)

    • Short-term debt securities issued in anticipation of future tax collections.
    • TANs are generally issued by state and municipal governments to provide immediate funding for a capital expenditure, such as highway construction.
    Term
    the three most commonly used money market instruments are:
    		 Definition
    • bankers' acceptances
    • commercial paper
    • negotiable certificates of deposit
    Term
    Negotiable CDs 
    		Definition
    Negotiable CDs are time deposits with a minimum face value of $100,000. Most, however, are issued for $1 million or more. They are unsecured promissory notes guaranteed by the issuing bank. Most negotiable CDs mature in one year or less. However, since they are negotiable, these CDs can be traded in the secondary market.
    Term
    Banker's Acceptance Notes 
    		 Definition
    A banker's acceptance is a short-term time draft drawn on a bank with a specified payment date, usually between one and 270 days. U.S. corporations typically use bankers' acceptances to buy goods and services in foreign countries.
    Term

  • Commercial Paper 

    		• Definition

    Corporations use short-term, unsecured commercial paper to raise cash to finance

  • accounts receivable and seasonal inventory declines. Paper maturity usually ranges from 30 to 270 days, although most paper matures within 90 days. It is issued in bearer form at a discount to the face value.

    • Term
    Treasury bills
    		 Definition
    Treasury bills are direct, short-term debt obligations of the U.S. government. They are issued every week using a competitive bidding process in maturities of one month, three months and six months. Once per quarter, the U.S. government issues Treasury bills with one-year maturities. T-bills have minimal interest-rate risk, since they have very short-term maturities. Treasury bills are issued at a discount from their par value. That is, they do not pay interest. They are sold with a minimum denomination of $1,000 and in multiples of $1,000 thereafter.
    Term
    Treasury Notes:
    		Definition

    •
    • Treasury Notes: Treasury notes are direct debt obligations of the U.S. Treasury that pay semiannual interest as a percentage of the stated par value, have intermediate-term maturities (1-10 years) and mature at par value.
    Term
    Treasury Bonds
    		 Definition
    • Treasury Bonds: Treasury bonds are the direct debt obligations of the U.S. Treasury that pay semiannual interest as a percentage of par value and mature at par, like Treasury notes. They differ from T-notes in the length of their maturities, which are generally 10 to 30 years. They are also usually callable at par beginning 25 years after issue.
    Term
    Federal Agencies:
    		 Definition
    Federal agencies are direct arms of the U.S. government. The securities that they issue are backed by the full faith and credit of the United States. Examples of federal agencies include the U.S. Postal Service (USPS), the Small Business Administration (SBA) and the Government National Mortgage Association (GNMA), or Ginnie Mae. Most federal agencies no longer issue securities directly to the public, with the exception of Ginnie Mae.
    Term
    what are the main types of non-marketable government bonds
    		 Definition
    Series EE, HH, and I savings bonds.
    Term
    Municipal bonds are classified into two categories which are
    		 Definition
    General Obligation (GO) Bonds and Revenue Bonds
    Term
    General Obligation (GO) Bonds are usually issued to fund properties or facilities used by what?
    		 Definition
    the public, such as government buildings, schools, prisons and police and fire stations.
    Term
    Revenue Bonds -
    		 Definition
    Revenue bonds are backed by user fees and other charges generated by a particular public works project. They are commonly used to finance the following endeavors:
    o Airports
    o Colleges and universities Toll roads and bridges
    o Public power systems
    o Sewer and water systems
    o Hospitals
    o Housing developments
    o Sports facilities and convention centers
    o Rapid transit
    o Industrial development
    Term
    tax-equivalent yield (TEY) formula
    		Definition
    For example, let's say Stanley Lehman, MD, is a high-income client of yours. He tells you that he earns a lot of money and is in the 35% tax bracket. You confirm his annual salary at $300,000 a year. Right now, 20-year munis are paying 4.8%. If Dr. Lehman is in the 35% tax bracket, the tax-equivalent yield (TEY) would be calculated as follows:

      .048      =   .048   =  7.38%  
     100-35         .65
    Term

    Stock Certificate

    		 Definition
    The physical piece of paper representing ownership in a company.
    Term
    Statutory voting
    		Definition
    Statutory voting is the standard "one share one vote" counting that governs voting procedures in most corporations. Shareholders may cast one vote per share either for or against a board of director nominee, but may not give more than one vote per nominee.
    Term
    Cumulative Voting
    		 Definition
    Cumulative Voting: Unlike statutory voting, where any shareholder with over 50% of the shares has the potential to control the voting outcome, cumulative voting improves minority shareholders' chances of naming nominees to the board of directors. In general, shareholders are able to weight their votes towards one or more candidates.
    Term
    Preemptive right
    		 Definition
    Preemptive right: Preemptive right refers to the right of shareholders to maintain a proportional ownership by purchasing newly issued shares of common stock from the company before they are offered to the public. Otherwise, a new issue would dilute the value of their investment.
    Term
    which investment holder is paid first or last in the event of a company's bankruptcy.
    		 Definition
    1. Wages owed to employees
    2. IRS (taxes)
    3. Secured debt
    4. Unsecured debt and general creditors
    5. Subordinated debt
    6. Preferred stockholders
    7. Common stockholders
    Term
    Rights
    		 Definition
    Also known as subscription rights, these privileges grant to existing shareholders the right to subscribe to shares of a new offering of common stock before they are offered to the public and at a lower subscription price than the market.
    Term
    Warrants
    		 Definition
    Warrants are like stock rights in that they offer the option to buy common stock in the future, at a specific subscription price. However, unlike rights, warrants usually do not expire for three to five years.
    Term
    Options
    		 Definition
    Options are contracts to buy or sell a certain number of shares of an underlying stock (usually in round lots of 100) at a specified price over a given period of time.
    Term
    Exchange Traded Funds
    		 Definition
    Exchange Traded Funds (ETFs): ETFs are a relatively new type of security which combine features of both stocks and mutual funds. Each ETF is designed to track an index and owns a number of stocks. The portfolio is not actively managed and the ETF is traded like a stock. Therefore, the price of the ETF fluctuates throughout the day based on market demand.
    Term
    Hedge funds
    		 Definition
    Hedge funds are aggressive portfolios designed to both maximize returns while minimizing risks. They are available only to small numbers of accredited investors and are therefore unregulated.
    Term
    what is the purpose of a refunding bond issue?
    		 Definition
    The purpose of a refunding bond issue is to pay off old, high interest rate debt. This is much like an individual refinancing a home mortgage loan when interest rates drop. A mortgage bond’s collateral is real estate owned by the company. A debenture has no collateral.
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