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Can you please explain the meaning of maturity date and redemption?
Are there any other words used interchangeable to maturity and redemption in paper FM?
Think of the redemption as being the amount at the maturity date
The redemption is amount( the return of mutual fund shares or of money invested in a fixed-income security) on or before its maturity date.
I don’t get it…
1) Redemption is the principal amount is repaid at the period-end of the loan and other securities (correct?)
2) Maturity is the end of the period of a security. For eg we took a loan for 5 years then it means the loan has maturity of five years, in other words, it is the expiration date when the loan will finish and it is also called as redemption date as well because it is the time when principal amount shall be repaid in full (correct?)
3) please explain what do you mean by mutual funds and how that works?
4) Also explain how does fixed income security works and is it true that they are called fixed income because they have fixed interest rate?
5) How many kinds of securities do we come across in paper FM in general and in overall ACCA professional papers?
1) Redemption refers to the repayment of the principal amount of a loan or other securities at the end of a specified period. It is the time when the borrower is obligated to repay the full principal amount. I was trying to help with your understanding!
2) True Maturity refers to the end of the period of a security, such as a loan.. The maturity date is also referred to as the redemption date because it is the time when the principal amount is repaid in full.
3) Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities, such as stocks, bonds, or other assets.
4) Fixed income securities are financial instruments that provide a fixed stream of income to the investor. They typically pay a fixed interest rate over a specified period of time.
5) so there are various types of securities that are covered such as stocks, bonds and derivatives.
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