Bonds Flashcards
Bonds and interest
Bonds have interest bearing obligations
Typically fixed rates and paid quarterly/semiannual
Bonds and maturity dates
At which point the principal amount must be paid back in full or risk default
Bonds have interest bearing obligations
Typically fixed rates and paid quarterly/semiannual
Bonds and interest
At which point the principal amount must be paid back in full or risk default
Bonds and maturity dates
What is a bond?
A loan made by an investor to a borrower
Represents a loan made by an investor to a borrower
What is a bond?
What are the details of a bond?
An IOU between the lender and borrower that includes the details of loan and its payments
An IOU between the lender and borrower that includes the details of loan and its payments
What are the details of a bond?
What are bonds correlated with?
Interest rates. When interest rates go up, bond prices fall
What solution do bonds provide?
Allow many individual investors to assume role of lender.
Allow many individual investors to assume role of lender.
What solution do bonds provide?
What is a fixed income instrument?
Provides investors a return with fixed periodic interest and payments and eventual return of principal at maturity
Provides investors a return with fixed periodic interest and payments and eventual return of principal at maturity
What is a fixed income instrument?
What does the US Treasury guarantee?
Government fixed-income securities, making these very low risk, but relatively low-return investments
Government fixed-income securities, making these very low risk, but relatively low-return investments
What does the US Treasury guarantee?
