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In bond valuations there are more quantifiable attributes to be used than in stock valuations. For bonds, you have predetermined cash payments, exact maturity or call date, and assessments from rating agencies with respect to insolvency risks. In stocks, there is no maturity, dividends change or are nonexistent, and earnings very over time. This is why mathematical discounted cash flow models work better for bonds than for stocks. Analysts, however, use these models for both. For stocks probaly the most commonly used method is comparison of Price to Earnings ratios among comparable companies.
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Ionic solid harder than molecular solids?
Ionic solids are typically harder than molecular solids because ionic bonds are stronger than intermolecular forces found in molecular solids. The ionic bonds in ionic solids result from the attraction between positively and negatively charged ions, contributing to their higher hardness compared to molecular solids, which are held together by weaker intermolecular forces.
What are the characteristics of corporate bond?
Corporate bonds are debt securities issued by corporations to raise capital. They typically have a fixed maturity date and pay a fixed interest rate to bondholders. They are considered relatively safer than stocks but riskier than government bonds due to the credit risk associated with the issuing corporation.
What's the difference between normal bonds and premium bonds?
Normal bonds are issued at face value and pay regular interest payments. Premium bonds are issued at a higher price than face value and do not pay interest; instead, investors are entered into a lottery for the chance to win cash prizes.
How do intermolecular forces compare to covalent and ionic bonds in terms of strength?
Intermolecular forces are weaker than covalent and ionic bonds. Covalent bonds involve the sharing of electron pairs between atoms, making them strong and stable. Ionic bonds involve the transfer of electrons from one atom to another, creating strong electrostatic attractions between oppositely charged ions.
Why do companies report a gain or loss when they repurchase their bonds?
Companies report a gain or loss when they repurchase their bonds because the book value may more/less than the amount that is used to repurchase (retire) a bond. There is no real economic gain or loss in the repurchase of bonds. This is because the perceived gain or loss is exactly offset by the present value of the future cash flow implications of the repurchase.
Are stocks riskier investment than bonds?
Yes, you can lose a stock, and you can lose a bond, but bonds are harder to lose, and can never decrease in value.
Which is more liquid stocks bonds?
Stocks are considered much more liquid than bonds. This is because stocks are riskier and the value of the stock is determined by the present market.
How can you make your cash work harder?
You can make your cash work harder by investing it in assets like stocks, bonds, or real estate, which have the potential to earn you more money over time than just keeping it in a savings account.
Why does stock have more potential for higher returns than bonds?
Bonds can be bought with set interest rates, meaning as time goes by, its yearly value goes up at a steady rate. Stocks, however, can jump up and down in value, depending on market value.
Why are federal securities such as bonds popular with investors?
Federal securities such as bonds are popular with investors because it is safer than stocks. It also yields higher interest rates per year than other instruments such as T-bills or stocks.
Why are federal securities such bonds popular with investors?
Federal securities such as bonds are popular with investors because it is safer than stocks. It also yields higher interest rates per year than other instruments such as T-bills or stocks.
Why buys bonds and not stocks?
Bonds and stocks serve different purposes to the investor, and ideally you should buy both. Advantage of investment-grade bonds: the issuer is committed to paying you a stated amount of money on a stated date. The disadvantage is your return is limited to the agreed-on amount. Advantage of stocks: potentially unlimited return on your investment. The disadvantage is there are no guaranteed returns with stocks; you could potentially lose everything you invested in them. Speculative-grade bonds, or "junk bonds," have a risk/reward system more like stocks than investment-grade bonds.
Are bonds recession proof investments?
Bonds are not completely recession-proof investments, as their value can be affected by economic downturns. However, they are generally considered safer than stocks during a recession because they provide a fixed income stream and are less volatile.
Why is the bond market less transparent than the stock market?
The bond market is less transparent than the stock market because bond transactions are typically conducted over-the-counter, meaning they are not traded on a centralized exchange like stocks. This lack of centralized trading can make it harder for investors to access pricing information and market data for bonds compared to stocks.
When bonds are sold for more than their face value the carrying value of the bonds is equal to What?
It prorated in it's decrease to face value
When the bonds are sold for more than their face value what is the carrying value of the bonds is equal to?
the face value plus the unamortized premium.
Why do investors buy corporate bonds?
Most investors tends to buy corporate bonds cause its risky thus the rate of return are grater than those of government bonds most of the time, while bonds are much more safer than most stocks.
