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Bond could for instance be if you lend money to the government. They would pay you an interest like if you would pay an interest in the bank.
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What is a principal of a bond?
The principal of a bond is the amount of a bond that interest rates are paid on by the person issuing it. I like to think of it as the initial amount the bond is worth. Example: Hudson Corporation issued a $10,000 bond at 14% interest. The $10,000 is the principal of the bond.
How can you avoid accrued interest on a corporate bond?
Buy the bond just after the coupon has been paid (or goes "ex coupon").
What statement about municipal bonds is not true?
For each bond, there is a variable amount of interest that is paid to the purchaser.
Who determines the rate of interest paid on a bond?
Bonds have a predetermined rate of interest called the stated or contract rate, which is established by the board of directors.
What does FRB mean on a bank statement?
Fixed rate bond: ie the interest being paid into the nominated account
How frequently is interest paid on a bond?
Interest is usually paid semiannually.
What is a principal of a bond?
The principal of a bond is the amount of a bond that interest rates are paid on by the person issuing it. I like to think of it as the initial amount the bond is worth. Example: Hudson Corporation issued a $10,000 bond at 14% interest. The $10,000 is the principal of the bond.
How can you avoid accrued interest on a corporate bond?
Buy the bond just after the coupon has been paid (or goes "ex coupon").
What statement about municipal bonds is not true?
For each bond, there is a variable amount of interest that is paid to the purchaser.
What is the interest rate the bond issuer pays to the bondholder called?
The interest rate paid on a bond is known as the coupon rate. A $1,000 fixed rate bond with a 5% coupon rate purchased at par would yield $50 annually in interest payments.
Who determines the rate of interest paid on a bond?
Bonds have a predetermined rate of interest called the stated or contract rate, which is established by the board of directors.
what interest rate is paid on EE Bonds?
From May 1, 2009 through October 31, 2009, the EE Bond interest rate is 0.70%.
What does FRB mean on a bank statement?
Fixed rate bond: ie the interest being paid into the nominated account
Define yield in mutual funds?
Yield is the interest earned on a bond, or the dividend paid on a stock or mutual fund.
What is the difference between the coupon rate and the interest rate?
Coupon rate is something that is paid semiannually. The interest rate is something that starts as soon as a bond is issued.
What is a certificate of debt issued by a government or corporation guaranteeing payment of the original investment plus interest by a specified future date?
This is a bond. A bond is distinguished by 4 main factors. First, the interest rate of the bond. Secondly, the term of the bond. Thirdly, how the bond is repaid, whether it is all at once at maturation or if yearly installments of interest are paid (coupons). Lastly, the risk factor of the bond is used to sort bonds by credit rating companies from AAA rating (the highest) to junk bond rating.
How are CDs and bonds different?
Unlike bond interest (paid periodically), the interest from a CD usually compounds, which means interest is earned on prior interest earned also. An investment in CDs, up to $100,000, is insured by the federal government.
