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Bonds and Treasuries

A note whereby the investor loans a corporation or government money at a set interest rate over a predetermined time period.

1,619 Questions

If you know interest rates are going up where is the best place to invest your money?

Banks and other lenders will benefit from this. However, financials may still have quite a way to fall before it makes sense to jump back into that sector.

But you can invest in GOLD because as after 2-3 weeks the marrage season will be going to start in middle east and in Asia.so there will be huge physical buying of GOLD and its prices will be rising.As u can see the affect of this season have been started.till today GOLD price touched to 905 and it will touch 1000 very soon and will make its new lifetime high.So i would like you to suggest that if u want to invest than invest in GOLD and will recomend u BLINDLY BUYING for long term trade.

What is potential equity shares?

potential equity shares are those

1. whose resources/considerations has been received

and 2. whose resources have been reinvested in business.

examples of potential shares are

convertible preference shares, convertible debentures, employees stock options and share warrant.

What is fungible mean in Term of financial?

If an asset is fungible, then all that means is it has the same terms, conditions, and rights as other assets in the same pool. Hence, one asset can be substituted or exchanged for another asset freely. Eg, the additional issue of ordinary shares of a company are fungible to the ordinary shares that are currently issued in the market.

Repo rate of rbi?

Repo Rate - also called Bank rate is the rate at which central banks lend loans to the member banks of a country. This rate actually impacts the rate at which these member banks grant loans to their customers

So, In India, The Reserve Bank decides the Repo Rate

I am 55 and have a 401k to reinvest since i quit working. where should i reinvest?

I would need to ask you some questions to give you a great answer but here is a good answer. At age 55 and either retired or very near retirement, preservation of capital is key. When will you need to start pulling the money out of the savings? You would be rolling your 401K into an IRA. I suggest at least one annuity. If you can wait 10 years for some of your money than 6% guaranteed for 10 years would come very close to doubling your money. In the meantime some other shorter IRA's might be wise if you need money sooner and those have guaranteed rates of 3-5 % depending on the duration of time.

What is the definition of Treasury Bill?

definition of TREASURY BILLS is...

treasury bills are issued by the state bank or central bank against the loan or money taken by federal government of that state.

What is relationship between a bond coupon rate and its duration?

bond coupon rates and yield rates have very similar effects and a very similar relationship to duration, lemme explain, by first explain durations effects in relation to interest rates, then yields and finally you can surmise that relationship between yield rates will be the same as coupon rates

Duration can be seen as the elasticity of the bond's price with respect to interest rates. When duration is 7, a 15 year bond will fall 7% in value if interest rates increase by 1%. In the data we've generated we can also determine the relationship between yields and duration by analyzing the change after a 50 basis point decrease in rates. The duration will rise as yields are lowered, and conversely a high coupon rate or high yield will result in lower durations. While a higher yield reduces the present value of all the bond's payments, it reduces the value of payments further in the future by a greater proportional amount. This amounts to a reduction in duration. Merck & Company's bond has the highest yield and therefore one would surmise that the duration for MRK should be lower than the other bonds, this is only true if all other variables are held equal (ceteris paribus). This is not the case. The bonds have wildly different coupons remaining. Eli Lilly's bond has a similar number of coupons remaining-suggesting a relatively good candidate for comparison-and a lower yield than MRK, leading one to expect LLY bond to have a higher duration than MRK. An astute financial student would discourage this comparison, citing that LLY exhibits the highest (7.125%) annual coupon rate, which would in turn reduce the duration. While comparisons between bonds will fail us due to their unique characteristics, it is easy to see the change when examining a single bond and the effect of a 50 basis point decrease in rates has on the bond's duration. Every single bond's duration rose, relative to itself before the basis change, as their yields were lowered. This helps prove our assumption of the inverse relationship between yield and duration.

What is the difference between investor funds and class d funds?

It's actually "investment grade" funds versus "Class D" funds. But anyway... Both are kinda like mutual funds--a lot of securities grouped together and sold in shares. Unlike mutual funds, which are comprised of stocks, bond funds are comprised of bonds. The difference is the quality of the bonds in the fund. Investment-grade funds hold nice, safe, well-regarded, boring securities that just sit there, pay interest and don't worry the fund manager too much. Class D fund deal in Class D debentures--D stands for Default. These things are super speculative, super risky and pay large returns if they succeed. You can play in these and make a lot of money quick; you can also play in these and lose your shirt quick. If you're going to invest in Class D funds, you need another shirt--some stable mutual funds, Treasuries, investment-grade bond funds, SOMETHING that you won't lose everything you have in. Also be ready to get out of the Class D fund at a moment's notice.

What does it mean to amoritize?

To account for over a period of time. For example, if a company amortizes the expenses associated with the acquisition of another company, it means that instead of recognizing all of those expenses in that particular fiscal year that the company will instead recognize a certain portion of those expenses each year for a certain number of years. Another example is relating to loans. If a loan is amortizing, it means that a portion of the principal balance is being paid each period (month, quarter, etc.) until paid in full.

Difference between repo rate and overnight rate?

Referencing the monetary policy is usually when these two rates are compared. Here's a high level version in plain English. First, definitions. The overnight rate is the interest rate, called the effective Federal Funds rate, that is used when banks lend money to each other in the Federal Funds Market to meet bank reserve requirements. These loans do not have any collateral. The repo rate is the interest rate, called the repurchase agreements rate, (and the opposite - reverse repo rate) used when the FOMC (Federal Open Market Committee) wants to adjust the country's money supply by way of adjusting the level of credit. When FOMC wants to increase credit during a recession, the FOMC will loan funds to specific Treasury Dealers, who in turn, will provide treasuries as collateral. These funds are deposited (credited) to the dealers' banks, which will cause funds to be available for loans to the general public. The dealers will pay the loans within a few days, with interest (repo rate). If, as an example, the economy is showing inflation, then FOMC wants to decrease credit. The opposite occurs. The FOMC becomes the borrower, receiving loans from and issuing treasuries to Treasury Dealers as collateral. Again, the loans are usually paid within a short period of time, and the reverse repo rate is used. Both the repo and reverse repo rates are part of the Repo Market. Now, here's the connection between the two markets, Federal Funds and Repo, in the monetary policy arena. In the news, the public hears about an interest rate change by the Fed (FOMC). This is the "targeted" Federal Funds rate. The FOMC springs into action during business hours, with the Treasury Dealers in the Repo market, adjusting the country's credit, using the targeted Federal Funds rate as a benchmark for the repo (reverse repo) rate. During evening hours, the banks are loaning to each other in the Federal Funds Market, using the repo rate as a benchmark for the effective Federal Funds rate. The effective rate (no collateral) will be slightly higher than the repo rate (has collateral). The next day, the FOMC will review results from the previous day to see how well the effective rate met the targeted rate, and the Repo Rate "dance" starts all over again. That evening, the banks will do a repeat performance of the Federal Funds "dance".

What to with 400 dollars?

There are essentially two things you can do with $400--if you might need it quick, put it in a savings account; if you can sit on it for at least six months, US Savings Bonds are good.

What is the role of a stock broker?

A stockbroker is a regulated professional individual, usually associated with a brokerage firm or broker-dealer, who buys and sells shares and other securities

What are fertilizer bonds?

you mean what chemical bonds? it depends on the fertilizer, nor is the formula always available to the public Sounds like a cute nickname for D-grade or slightly above D-grade debentures--manure is a fertilizer, hence the reference.

Where do you redeem US savings bonds?

In most states, most banks, savings and loans, and similar institutions will cash savings bonds for you. The process is similar to cashing a check, but you might want to call ahead, as some financial institutions no longer offer this service

Are bank America bonds good investments?

HMM I have no idea about the future, but the Bank American Bond -I bought in January for $15,000 is now worth $7800.00. Of course I hope it comes back.

A blank is invested by managers in a diversity of stocks bonds and other securities?

A fund invested by managers in a diversity of stock, bonds, and other securities is called a mutual fund. Most mutual funds are open-ended which means that stockholders may purchase or sell shares at any given time.stockholders can buy or sell shares of the fund at any time

What are the 3 adjustments that have to be made in going from annual to semiannual bond?

1) divide the annual interest rate by 2

2) multiply the number of years by 2

3) divide the annual yield to maturity by 2