1. Bonds represents a loan made by an investor to a corporation or government (Hayes, 2020). Bonds are used by businesses, municipalities, states, and governments to finance projects and operations (Hayes, 2020). One feature of a bond is its yield to maturity (YTM). The YTM measures the annual return an investor would receive if a particular bond is held until maturity ( Investing Answers, n.d.). To calculate the YTM we use the following formula:

Yield to maturity (YTM) = [(Face value / Present value)^{1/Time period}]-1(Lumen Learning, n.d.)

The primary importance of yield to maturity is that it enables investors to draw comparisons between different securities and the returns they can expect from each (Corporate Finance Institute, n.d.). It is important for determining which securities to add to their portfolios (Corporate Finance Institute, n.d.). It's also useful in that it also allows the investors to gain some understanding of how changes in market conditions might affect their portfolio because when securities drop in price, yields rise, and vice versa (Corporate Finance Institute, n.d.).

What are the alternate perspective on above selected bond feature?

2. One bond feature is "putability".If a bond is putable, it means that the holder of the bond has the option at any time, for any reason, to force the issuer to pay the principle of that bond before maturity (Lumen Learning, n.d.).A put provision allows the holder of the bond to be a bit more strategic in the treatment and cashing out of the bond. For example, if the interest rates have increased since the purchase of the bond, the holder might get a better return on that bond.

The cost of a putablebond is higher than the price of a straight bond, and the yield on a putablebond is lower than that of a straight bond. All in all, a put bond seems less of a risk than a straight bond.

What are the alternate perspective on above selected bond feature?