An index-linked bond is a debt security whose interest payments are linked to a specific index, typically a consumer price index (CPI). The principal value of the bond is also indexed to the CPI, so that it retains its real value over time. Index-linked bonds are issued by governments as a way to hedge against … Read more
A credit rating is an assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. A credit rating is typically issued by a credit rating agency, which uses a standardized rating system to assess the creditworthiness of a borrower. The AAA credit rating is the … Read more
What are high yield bonds? High yield bonds are a type of bond that offer a higher yield than other bonds. They are also known as junk bonds. How can you invest in high yield bonds? You can invest in high yield bonds through a broker. What are the 5 characteristics of bonds? 1. Bonds … Read more
The Bond Market: Everything You Need to Know What is bond market example? A bond market is a market in which bonds are traded. Bonds are debt securities that are issued by governments and corporations in order to raise capital. The bond market is used by investors to buy and sell bonds, and by issuers … Read more
Par value is the face value of a bond or other fixed-income security. This is the amount that the issuer agrees to pay the holder at maturity, assuming that all interest payments have been made on time. The term is also used more generally to refer to the original value of an asset, even if … Read more
The maturity date is the date on which the final payment of principal and interest is due on a bond or other fixed-income security. The term is also used more generally to refer to the date on which any financial obligation must be repaid. How do you calculate the maturity date of a bill of … Read more
A strip bond is a type of fixed income security in which the coupon payments are separated from the principal, or “face value”, of the bond and are sold as separate securities. The principal and interest payments are then made to the holders of the separate securities at maturity. Strip bonds are also known as … Read more
Interest Only (IO) Strips are a type of fixed income security that pays only the interest on a loan or mortgage. The principal is not repaid until the end of the loan term. IO Strips are typically used by investors who are looking for a steady stream of income and are not concerned with the … Read more
What does investment grade credit rating details mean? What is the difference between high yield and investment grade? The primary difference between high yield and investment grade is that high yield bonds are considered to be more risky than investment grade bonds. This is because high yield bonds have a higher probability of default than … Read more
