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Old 05-02-2019, 03:42 PM
Sullinator Sullinator is offline
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Default What is a redemption

I noticed in the Infinite actuary for FM redemption is not defined probly because to solve problems involving it you don’t need the definition of it, but if someone asks “what is a redemption?”, then how do you answer that?
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Old 05-02-2019, 04:15 PM
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Gandalf Gandalf is offline
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It would be easier to address in context, but I think it normally refers to paying off a bond at maturity, or maybe paying it off earlier if it is called. It shouldn't IMO apply to selling a bond to a third party prior to maturity. I doubt they would use "redemption" for payments upon call, but it wouldn't shock me.

If not referring to a bond, I would want to see the whole question.
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Old 05-03-2019, 12:19 PM
Sullinator Sullinator is offline
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Quote:
Originally Posted by Gandalf View Post
It would be easier to address in context, but I think it normally refers to paying off a bond at maturity, or maybe paying it off earlier if it is called. It shouldn't IMO apply to selling a bond to a third party prior to maturity. I doubt they would use "redemption" for payments upon call, but it wouldn't shock me.

If not referring to a bond, I would want to see the whole question.
Like if you tell someone that bonds have redemption, and they ask you “what is a redemption?”, like someone who knows nothing about financial math. What’s the best way to explain it to them? Like everyone knows what a loan is but not many know what a redemption is.
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