Business and Personal Finance Dictionary

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• ACCRUAL BOND
  
  1. Bonds that pay the investor an above-market coupon rate as long as a reference rate is between preset levels established at the time the security is issued. A type of structured note. Also called range bonds. 2. A type of CMO security that does not pay holders periodic interest in cash. Instead, periodic interest for these bonds is accrued. It is added to the principal amount due to the holder at a later date. See Z tranche.
  
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