A zero-coupon bond, also known as an accrual bond, is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity when the bond is redeemed for its full face value.

## What is Yield Curve/term Structure?

If interest rates are plotted on a graph, with time on the x-axis and the rate on the y-axis, the resultant curve is called the yield curve or term structure.

## What is Volatility?

Volatility come in two types, namely: 1. Historic volatility: this is the yearly standard deviation of a product’s price. The more it goes up and down in price, the higher the measure of volatility becomes. 2. Implied volatility: since volatility is a measure of risk, it is used to input models to price options. Therefore if the […]

## What is the VIX?

The Cboe Volatility Index (VIX) is a real-time index representing the market’s expectations for the relative strength of near-term price changes of the S&P 500 index (SPX).

## What is Value-at-risk (VAR)?

VAR is a risk management technique that measures and quantifies the level of financial risk within a firm, portfolio, or position for a given holding period and confidence interval.

## What is Treasury Bill?

This refers to a short-term debt instrument with a maximum maturity of twelve months issued by a government.

## What is Trading Book?

The portfolio where trading positions are recorded when financial instruments are purchased and sold regularly by traders is called the trading book.

## What is Trading?

Trading is generally known as the process of purchasing and selling financial instruments frequently.

## What is Synthetic Collateralized Debt Obligation?

This is a type of collateralized debt obligation that uses credit default swaps as the assets in the special purpose vehicle.

## What is Synthetic?

This is a general term used in financial markets to describe the framework of a financial instrument or product using unoriginality.

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