F4E: Markets: Week 2

 Bonds, these are as powerful as t our James Bond.

                          A bond is a type of legal contract upon which the government or the company borrows money from the investors for a certain period of time, maximum period may be upto 30 years. During these period the bond holders will be paid a fixed interest rate. Deficits of the government are financed by bond issues, increased heavy demand. Types of bonds include: Debenture, Mortgage, Zero-Coupon, Variable rate, Convertible, Collable, Junk bonds etc.

                          Bond markets is valued very much more than the global stock market. Some basic bond terminology include coupon, face value, maturity, par value, current yield, yield to maturity etc.. Most of the investors dont know what these actually are but is a good practice to know how various factors regarding these are determined. It is good to know the impact of the interest rates as well.

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