Key Components of Bonds 1. Face Value (Par Value): Face value, or par value, is the amount the issuer promises to pay the bondholder at maturity. It is usually issued in... Read More
Author: finxl9999
A bond is essentially a loan that an investor provides to the borrower, which may be a corporation or government. In return for this loan, the issuer promises to pay... Read More
A bond is essentially a loan that an investor provides to the borrower, which may be a corporation or government. In return for this loan, the issuer promises to pay... Read More
Conclusion Bonds are major components of the global financial system and offer investors a relatively stable source of income. However, investors will not make intelligent decisions on adding bonds to their... Read More
3. Inflation Risk: Inflation reduces the value of money; thus, it diminishes the purchase power of the fixed interest received by the bond. If inflation moves higher than the coupon... Read More
Bond Pricing and Interest Rates The price of a bond is responsive to prevailing interest rates in the market. This means that an increase in interest rates lowers the price of... Read More
Bonds Risks While bonds are safer compared to equities, they are not a completely risk-free investment. These include the following risks: 1. Interest Rate Risk: It has already been established that the... Read More
3. Corporate Bonds: Such bonds are issued by companies to raise capital for expansion, acquisitions, and other requirements. Corporate bonds usually yield higher than government bonds but pose more risks-that... Read More
3. Corporate Bonds: Such bonds are issued by companies to raise capital for expansion, acquisitions, and other requirements. Corporate bonds usually yield higher than government bonds but pose more risks-that... Read More
Types of Bonds There are many kinds of bonds but with distinctive purposes and risk profiles. As such, there are: 1. Government Bonds: These bonds are from national governments. Because it... Read More