One of the key concepts you will be studying in CPCU 540 is zero-coupon bonds. Here is the difference between a regular bond & a zero-coupon bond:
When you buy a regular bond, you pay the face value for it. While you own the bond, you’ll get interest paid to you periodically until the maturity date, at which time the face value gets paid/returned to you. As such, your earnings or profits come from the interest you get paid. So, let’s say I buy a $100 bond for $100, I get $5 a year for 3 years, then I get my $100 back at the maturity date – my profit is $15 (from in interest).
Historically, when you bought a regular bond, it literally had coupons attached that you had to mail in or drop off to redeem the interest payments at the specified interval. A zero-coupon bond gets its name from the fact that they had no coupons to turn in, because you didn’t get any interest.
Hopefully, this explanation sheds some light for anyone else that was struggling to understand these terms. But we can help you with more than just zero-coupon bonds! We’ve launched our CPCU 540 study materials, which is based on the third edition release. It is jam-packed with tons of bonus content to help you master the concepts – get your e-bundle today!
CPCU 540 Study Materials
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For buyer's personal use only (non-transferrable and not for resale)
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Based on CPCU 540: Contributing to Insurer Financial Performance (1st edition)
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Delivery for online study program: Instant access provided after purchase
- Delivery for printables-only bundle: PDF instantly sent by email after purchase
Full Study Program
Everything you need to fully prepare- Online video lessons (with searchable transcripts)
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- Chapter quizzes
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About your instructor
Insurance Exam Guides (IEG) was founded by Stacy Trinh, CPCU®, who first started her teaching journey at the request of her co-workers who were preparing for their CPCU exams. Because of her reputation as an adept trainer and motivator, Stacy's co-workers had asked her to lead a class. The feedback on her sessions and study materials was overwhelming positive, and her students encouraged her to share what she had to offer with the rest of the CPCU community.
Since then, Stacy created a library of study materials for both CPCU® and AINS® that have helped thousands of students pass their exams. As an accounting major and former claims adjuster, her style of instruction incorporates both a financial and operational perspective that makes her study materials well-rounded. She looks forward to helping many more students continue to succeed, including you!
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