Government Bonds & E Savings Bonds David A Barton Colorado Technical University Online Government Bonds & E Savings Bonds Retrieved from: Treasury Direct http://www.treasurydirect.gov/BC/SBPrice EE BONDS: $ 50 - $500 - $1‚000 Oct-2001 | | Oct-2004 | | Oct-2007 | | Oct-2010 | Value | | Int. Rate | | Value | | Int. Rate | | Value | | Int. Rate | |
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of Bonds Fixed rate bonds have a coupon that remains constant throughout the life of the bond. A variation are stepped-coupon bonds‚ whose coupon increases during the life of the bond. Zero-coupon bonds (zeros) pay no regular interest. They are issued at a substantial discount to par value‚ so that the interest is effectively rolled up to maturity (and usually taxed as such). The bondholder receives the full principal amount on the redemption date. High-yield bonds (junk bonds) are bonds that
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PIMCO analysis of bond markets This analysis gives investors thorough information about bond markets and provides an overview risks faced by bondholders. Purchasing a bond means you are lending money to a government‚ whereby the issuer provides a bond in which promises to a specified interest rate during the bond’s life. The capital value will be repaid at the time of investment when a bond reaches maturity. Therefore‚ it is suitable for those investors who seek a predictable income with
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Commercial papers (CP) are unsecured‚ wholesale promissory notes with fixed maturities for up to one year‚ usually issued at a discount to par value and repay full par at maturity. The interest earned is thus implied in the difference between the amount the company receives and the higher it repays. CP:s are largely used to finance accounts receivables and are essential in keeping many businesses afloat. The bond market is another environment where debts are issued and taken up by investors
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Shares give their holders part of the ownership of a company. (Shareholders have a part of the ownership.) Shareholders receive a proportion of a company’s profits as dividend‚ and may be able to make a capital gain by selling their shares at a higher price than they paid for them. (Shareholders receive dividend and may be able to make a capital gain by selling their shares at higher price than they paid for them.) 4/29/2014 2 Discussion Discussion Why do most companies
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of a bond? answer: if possible‚ begin this lecture by showing students an actual bond certificate. We show a real coupon bond with physical coupons. These can no longer be issued--it is too easy to evade taxes‚ especially estate taxes‚ with bearer bonds. All bonds today must be registered‚ and registered bonds don’t have physical coupons. 1. Par or face value. We generally assume a $1‚000 par value‚ but par can be anything‚ and often $5‚000 or more is used. With registered bonds‚ which
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24cm long. "I must have big feet‚ my foot is nearly as long as my Mom’s!" But then she thought to measure heights‚ and found she is 133cm tall‚ and her Mom is 152cm tall. In a table this is: Allie Mom Length of Foot: 21cm 24cm Height: 133cm 152cm The "foot-to-height" ratio in fraction style is: Allie: 21 133 Mom: 24 152 So the ratio for Allie is 21 : 133 By dividing both values by 7 we get 21/7 : 133/7 = 3 : 19 And the ratio for Mom is 24 : 152 By dividing both values by 8 we get 24/8 : 152/8
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Market 1. Capital Market Capital markets are financial markets for the buying and selling of long-term debt- or equity-backed securities over one year is traded. Security includes- shares‚ debentures‚ bonds etc. A key division within the capital markets is between the primary markets and secondary markets. In primary markets‚ new stock or bond issues are sold to investors‚ often via a mechanism known as underwriting. The main entities seeking to raise long-term funds on the primary capital
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Convertible Bonds A convertible bond is a bond that can be converted into shares of common stock. Therefore‚ these are two sources of value for this security: the value of the bond components‚ and the value from possibly converting the security into shares of common stock. Features of a Convertible Bond The basic features of a convertible bond can be illustrated by a hypothetical example. On November 1‚ 2003 ("today")‚ Apple‚ had $400 million in 8.80 percent (annual payments) convertible bonds due in
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stocks and bonds. Though they have some similarities to each other‚ they differ greatly in many aspects. Broadly speaking‚ both financial instruments enable one to invest in corporations‚ public and/or private‚ with possible profitable returns in the future. Stocks (or shares)‚ by definition‚ are shares of ownership in a company. By purchasing stocks in a company‚ the investor becomes a part owner‚ and thereby owns a percentage share of the company’s after tax profits. Stocks/shares have two key characteristics:
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