Finance Glossary

Accrual bond

A bond on which interest accrues but is not paid to the investor during the time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is paid at maturity. Junk Bond A junk bond is a bond that is rated below the investment grade before the purchase. It may also be known as a high yielding bond, non investment grade bond or speculative grade bond Opportunity Cost Opportunity Cost, which is sometimes known as economic opportunity loss is an economist’s approach to costs, whereby the cost of a decision is measured against the likely decision’s alternative. It is a way of working out the cost of missing out on the next best alternative.