2.5 Bond Certificates

Question 1

What is the principal of the bond?

Answer 1

The amount the investor lens to the borrower when the investor buys the bond

Question 2

Par Value is typically how much?

Answer 2

$1,000

Question 3

Bearer Bonds or Coupon Bonds are?

Answer 3

Old-fashioned bonds certificates they have coupons attached but no owners name printed on them. Anyone who possesses the bear bond certificate may present a coupon to receive an interest payment or present the bond itself or payment at maturity. Because Barry bonds are not registered to a specific owner they can easily be stolen

Very rare these days in the U.S.

Anyone depositing bear bond coupons must present identification and that info is passed to the IRS

Question 4

Registered Bonds

Answer 4

Certificates issued to the bondholder, with the owner’s name printed on them and no coupons attached

Question 5

Book-entry Bonds

Answer 5

When the bonds are held in the street name the broker or dealers are listed as owners rather than their customers.

The customers are said to have beneficial ownership allowing them to maintain all benefits, such as transfer and voting rights