| marketability | The feature of an asset that reflects its ability to be sold quickly to recover the purchaser's funds.
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| liquidity | The quality or capability of any asset to be sold quickly with little risk of loss and possessing a relatively stable price over time.
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| default risk | The risk to the holder of debt securities that a borrower will not meet all promised payments at the times agreed upon.
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| expected yield | The weighted average return on a risky security composed of all possible yields from the security multiplied by the probability that each possible yield will occur.
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| junk bonds | Corporate debt securities bearing credit ratings below investment grade.
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| credit derivatives | Financial instruments designed to reduce a lender's exposure to default risk.
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| call privilege | The provision often found in a bond's contract (indenture) that permits the borrower to retire all or a portion of a bond issue by buying back the securities in advance of their maturity.
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| prepayment risk | The probability that a loan or security (especially securities that draw their earnings from pools of loans) will be paid off ahead of schedule, lowering the investor's expected yield from the instrument.
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| event risk | The probability that changes inside a firm or other security-issuing individual or institution or external happenings will affect the value of the securities involved.
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| tax-exempt securities | Debt securities issued by state, city, county, and other local units of government or by other qualified borrowers whose interest income is exempt from federal taxation and from most state taxes as well.
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| convertibility | A feature of some preferred stocks and bonds that entitles the holder to exchange those securities for a specific number of shares of common stock.
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| interest rate structure | The concept that the interest rate or yield attached to any loan or security consists of the risk-free (or pure) rate of interest plus risk premiums for the security holder's exposure to various forms of risk.
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