If the purchase price of a bond is equal to its par value, the coupon rate is equal to the yield to maturity. A bond’s face value, or stated value at the time of issuance, as established by the issuing corporation, is its par value. The majority of bonds have a $100 or $1,000 par […]

Municipal bond interest is tax-free in the United States, however there may be state or local taxes, or both. Be aware that if you receive Social Security, your bond interest will be recognized as income when determining your Social Security taxable amount. This could result in you owing more money. Municipal bond interest rates are

The Federal Reserve, as America’s central bank, is in charge of regulating the dollar’s money supply. The Fed creates money by conducting open market operations, or buying securities in the market with new money, or by issuing bank reserves to commercial banks. Bank reserves are subsequently multiplied through fractional reserve banking, which allows banks to

According to one theory, your stock portfolio should have a ratio of equities equal to 100 minus your age. So, if you’re 30, your portfolio should consist of 70% stocks and 30% bonds (or other safe investments). If you’re 60, your portfolio should consist of 40% equities and 60% bonds. What is the best stock

Treasury yields can rise if the Federal Reserve raises its federal funds rate objective (i.e., tightens monetary policy), or even if investors just expect the fed funds rate to rise. What does an increase on the 10-year Treasury mean? Treasury securities are federal government loans. Maturities can range from a few weeks to more than

In essence, a bond’s price fluctuates based on the value of the income given by its coupon payments in comparison to broader interest rates. If current interest rates rise faster than the bond’s coupon rate, the bond loses its appeal. When equities fall, do bonds rise? Bonds have an impact on the stock market because

Most surety underwriters begin their careers as insurance agents, and as they gain experience with surety underwriting, they expand their product offerings to include surety bonds. Insurance companies, according to the Bureau of Labor Statistics, require their agents to have at least a high school education, with more than a third of all agents having

The federal government issues savings bonds, which are backed by the “full faith and credit” guarantee. Savings bonds, unlike Treasury bonds, can be acquired for as little as $25. Savings bond interest is taxed at the federal level, just like Treasury bonds, but not at the state or municipal level. Savings bonds are available from

Treasury bonds are often regarded as one of the safest investments in the world, if not the safest. They are deemed risk-free for all intents and purposes. (Note that they are risk-free in terms of credit, but not in terms of interest rate risk.) Bond prices and yields are usually compared to those of US

Treasury bonds are often regarded as one of the safest investments in the world, if not the safest. They are deemed risk-free for all intents and purposes. (Note that they are risk-free in terms of credit, but not in terms of interest rate risk.) Bond prices and yields are usually compared to those of US