The payment schedule of
financial instruments
Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity or a contractual right to receive or deliver in the form ...
defines the dates at which payments are made by one party to another on for example a
bond
Bond or bonds may refer to:
Common meanings
* Bond (finance), a type of debt security
* Bail bond, a commercial third-party guarantor of surety bonds in the United States
* Chemical bond, the attraction of atoms, ions or molecules to form chemica ...
or
derivative
In mathematics, the derivative of a function of a real variable measures the sensitivity to change of the function value (output value) with respect to a change in its argument (input value). Derivatives are a fundamental tool of calculus. F ...
. It can be either customised or parameterised.
Parameterised Schedule
The schedule is generated based on a set of rules and market conventions to define the frequencies of the payments.
These parameters include:
*Payment Frequency (Annually, Semi Annually, Quarterly, Monthly, Weekly, Daily, Continuous)
*Payment Day - Day of the month the payment is made
*
Date rolling
Date or dates may refer to:
*Date (fruit), the fruit of the date palm (''Phoenix dactylifera'')
Social activity
*Dating, a form of courtship involving social activity, with the aim of assessing a potential partner
**Group dating
* Play date, a ...
- Rule used to adjust the payment date if the schedule date is not a
Business Day
A business day means any day except any Saturday, any Sunday, or any day which is a legal holiday or any day on which banking institutions are authorized or required by law or other governmental action to close.
The definition of a business day ...
* Start Date - Date of the first Payment
* End Date - Also known as the Maturity date. The date of the last payment
Customised Schedule
The schedule consists of a series of dates that define exactly when payments will be made.
The payment schedule can also be linked to achievement or fulfillment of certain predefined tasks or events or even stages against which payments are required to be made by one party to another
Financial markets
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