Notes On Bonds And Bonds - 873 Words

a) What are bonds? What are their features and how are they traded? Bonds are instrument of indebtedness of the bond issuer to the holder. A bond is can also be defined as a debt security under which conditions the issuer owes the holder debt which comes with conditions and there is an obligation to pay interest and repay the principal at a later date when the bond matures. Sometimes interest, maybe payable at fixed intervals, for example semiannual, monthly, annually. Bonds usually are negotiable and this simply means that ownership of the instrument can be transferred in the secondary market. Features †¢ Set Maturity Dates — maturity dates for bonds are set and can range from one to 30 years. Short-term bonds can mature in 3 years or less while intermediate bonds matures in 10 years or less and long-term bonds mature in 10 years and more. †¢ Interest Payments — Depending on the bond structure, they can offer interest. Therefore fixed rate bonds offers fixed interest payments on a regular schedule for the life of the bond; Floating rate bonds have variable interest rates which are adjusted periodically; and, Zero coupon bonds which can be purchased a discounted price of face value at maturity. However this type of arrangement does not offer periodical interest rates. †¢ Principal Investment Repayment — when the bond reaches maturity the issuers are obligated to repay the full principal amount of a bond in a lump sum. †¢ Credit Ratings — One can access the default risk byShow MoreRelatedBond Note On Bond And Bond844 Words   |  4 PagesAfter completing the table of bond valuations I noticed some definite trends. Consider the AAA rated bond I chose in my valuation, yielding a 3.13% to maturity. As the remaining two bonds are BB and CCC, both have noticeably high yield to maturity percentages. In my observation, As the bond credit rating decreases, the yield to maturity percentage increases. The higher the yield, the more likely it is that the firm issuing the bond is not of high quality.(High/low yield bonds, 2006) Coupon rate and theRead MoreNotes On Bonds And Bonds1770 Words   |  8 PagesChapter One Bond Basics What are bonds? Bonds are investment tools in form of a debt. When the government, corporate bodies, or municipalities want to borrow from the public, they issue bonds. By investing in bonds, you are simply lending your money to the issuer of the bond (government or a corporation) at an interest for a given period of time. Usually bonds have a face value, which is the money being borrowed, the coupon rate which is the interest rate to be paid to the investors and the maturityRead MoreNotes On Bond And Bond Rating1140 Words   |  5 PagesIntroduction to bond and bond ratings A bond is a form of debt in which you loan your money to a company, city, or government and in return they agree to return the money to you after an agreed upon time, with payments of interest to you while they hold your money (Wall Street Journal, 2015). There are many different kinds of bonds, and they are sold to fund various different projects. Bonds are seen as a safe investment and also offer investors a steady stream of income from the interest paymentsRead MoreNotes On Bonds Valuation And Bond Rates1107 Words   |  5 PagesBonds Valuation Bond Company/ Rating Face Value (FV) Coupon Rate Annual Payment (PMT) Time-to Maturity (NPER) Yield-to-Maturity (RATE) Market Value (Quote) Discount, Premium, Par A-Rated General Electric Capital/AA $1,000 4.00% $ 40.00 15 3.897% $1,011.70 Premium B-Rated Hercules Inc./BB $1,000 6.50% $ 65.00 15 5.944% $1,055.00 Premium C-Rated Albersons Inc./CCC $1,000 8.00% $ 80.00 17 8.053% $ 995.00 Discount    Explain the relationship observed between ratings and yield to maturity. So ByRead MoreNotes On The Bond Bikers1705 Words   |  7 Pages Bikers are strange. They are tough, frightening, and sometimes a little crazy, but coming from a biker, I can tell you: they are crazy in a completely sane way. The bond bikers share is a strong one. Bikers are brothers, and it does not take much to create this bond. Strangers can become friends overnight with the sole commonality of riding. Your background, your history, your beliefs, none of it matters to them. What truly matters to them is whether or not you ride. Obviously, I do not mean oneRead MoreNotes On Redeeming Savings Bonds Essay1662 Words   |  7 Pagessavings bonds that are property of the estate, reporting rules from the IRS can make the transaction complex. As depicted in the article Redeeming Series E Savings Bonds of the Decedent, redeeming savings bonds is not a difficult process. However, reporting the interest income earned on the savings bonds is where the complexities exist. As a result, imp lications may result for the estate if the executor is not aware of the rules the IRS set forth for reporting interest income on the savings bonds. Note:Read MoreNotes On The And Corporate Bond Market876 Words   |  4 PagesApple Bonds in Switzerland Introduction In February 2015, Apple Inc. has completed the first issuing of bonds denominated in Swiss Franc. Apple Inc. has successfully raised 1.25 billion Swiss Francs (USD$1.35 billion) from the sale. There were two parts of bond which were 875 million Swiss Francs bond due to mature in November 2024 with coupon rate of 0.375% and a 375 million Swiss Francs 15-year bond with coupon rate of 0.75%. Due to the negative of Switzerland’s government debt yield, Apple IncRead MoreQuestions On Notes On Corporate Bonds Essay734 Words   |  3 PagesEthan LeClair 5/28/16 EC341 Homework Ch 1,2,3 Chapter 1: 1. Three month treasury bills generally fluctuate more than the other two. While Corporate Bonds are generally the ones which give the highest interest rate. 7. Some other examples of financial intermediaries are insurance companies, mutual funds, and investment banks. 11. Generally when interest rates decrease, people are more likely to invest since it will be cheaper than when the interest rates are higher. 12. No, since people whoRead MoreNotes On Bonds And Debt Investment957 Words   |  4 Pages Bonds are financial instruments that are used as debt investment. Bonds are a means for an investor to lend or loan money to an entity or organisation or the government. Time of maturity is usually predetermined (Bodie, Zvi, Kane, and Alan 12). The interest rate for this transaction however might or might not be fixed or be variable, otherwise known as the spot rate. The bonds are very powerful instruments in the market nowadays. T-bills, which are government issued are instrumentsRead MoreAcc 545 Restructuring Debt1376 Words   |  6 Pagesrecent financial troubles. Even though the company is in the process of reorganizing one believes this information will help a company in reporting the restructuring of debt. One will provide information on the requirements of reporting debt on bonds, notes, and capital leases. In performing this one will also provide the journal entri es one would need to record to restructure the company’s debt along with a comparison of the debt for the company’s current reporting. One will also provide valuable