Question
what do you think? do you agree or disgree? what is your opinion? -How would you describe the characteristics and personality of bonds? Bonds are
what do you think? do you agree or disgree? what is your opinion?
-How would you describe the characteristics and personality of bonds? Bonds are pretty much based on three things: 1) coupon rate, 2) maturity, and 3) face value. Coupon rate is how much interest is going to be paid on that bond/FV. Maturity is how long it's going to take for that bond to mature to PV. Face value (FV) is that principle amount that will be given back when the bond matures. They're pretty straight-forward. -How do you "get paid" by owning bonds? You receive the money by its maturity date, or decide to sell it. It's like lending money to the government or a company and they pay you back + interest. -What are some reason why investors purchase and hold bonds? It's predictable unlike stocks. Less risk, but (typically) less return. -If you have or are planning to have an investment portfolio, what type of bonds would you like to put in it if any? I don't plan on investing anytime soon, but I would invest in corporate bonds so that I would have a larger yield. But, at most, my portfolio percentage for bonds would be 3-5%, since I prefer riskier investments. -Is there such a thing as a bond which has a negative current yield? Who or what would buy these? A negative current yield exists when the interest payment is negative or if the bond's market value is less than 0. This causes the bond-holder to lose money. Someone would buy a bond with a negative current yield if they expected deflation in the near future, since that negative yield would turn positive. The bonds also have good liquidity.
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