Bonds

To begin with, bond prices and interest rates fluctuate in opposite directions. When interest rates fall, a bond’s price rises, and when interest rates rise, a bond’s price falls. Second, longer-maturity bonds have much higher interest rate risk than shorter-maturity bonds. What happens if bond prices rise? Bonds have an impact on the stock market […]

Going short on bonds means an investor or trader believes bond prices will decrease and wants to profit from that adverse attitude – for example, if interest rates are predicted to rise. Bond derivatives, such as futures and options, are one way to short the bond market or hedge an existing long position against a

With the release of The Massive Short, the big financial catastrophe finally gets its star turn on the big screen. The film, which is based on Michael Lewis’s New York Times bestseller of the same name, chronicles the story of six contrarian traders who foresaw the housing crisis before almost anybody else. Their intelligence allowed

A government bond is a financial asset that is issued by the government to fund its spending and commitments. Coupon payments are periodic interest payments made by government bonds. Government bonds issued by national governments are frequently seen as low-risk investments since they are backed by the issuing government. What is the purpose of government

A bond, like an IOU, is a debt security. Borrowers sell bonds to investors who are prepared to lend them money for a set period of time. When you purchase a bond, you are lending money to the issuer, which could be a government, a municipality, or a company. In exchange, the issuer promises to

When governments and enterprises need to raise funds, they issue bonds. You’re giving the issuer a loan when you buy a bond, and they pledge to pay you back the face value of the loan on a particular date, as well as periodic interest payments, usually twice a year. Bonds issued by firms, unlike stocks,

When governments and enterprises need to raise funds, they issue bonds. You’re giving the issuer a loan when you buy a bond, and they pledge to pay you back the face value of the loan on a particular date, as well as periodic interest payments, usually twice a year. Bonds issued by firms, unlike stocks,

The term “retirement of securities” refers to the cancellation of stocks or bonds because their issuer has bought them back or because their maturity date has passed (in the case of bonds). What is the meaning of bond retirement? The term “retirement of bonds” refers to the repurchase of previously issued bonds from investors. At

The coupon rate is the amount of interest that will be paid each year depending on the security’s face or par value. What is a bond’s coupon rate? The coupon rate is the annual yield on a bond that an investor can anticipate to receive while keeping it. It is computed by dividing the sum

An annulment is a rendering void. a. The cancellation of a contract or deed. b. A clause in a contract or deed that allows it to be annulled. When it comes to municipal bonds, a defeasance refers to the legal and financial processes for making an outstanding bond issue worthless. Although a defeasance is usually