Fixed income securities are everyone’s favourite while safe capital investing is the first preference. Although, they offer lower returns as compared to equity and other risky investment options.
When the government or corporate requires funds, they may consider issuing bonds. They are financial instruments which raise funds from the general public for a specific period.
The coupon rate is the annualized interest amount. It is the percentage of the face value that a bond pays in one year.
Bonds have become one of the most effective financial instruments to offer regular income to the holder without a massive risk of losing the principal amount.
The recent market correction has shifted the choice of investment from equity to debt instruments. Irrespective of the type, investment decisions are a trade-off between the potential rewards and risk involved and each investment is subject to some risk.
The coupon rate is the annualized interest amount. It is the percentage of the face value that a bond pays in one year.
Bonds have become an ideal investment instrument for investors who do not want to put all of their eggs in one basket.
As an investor, you will be paid interest during the life of the bond and receive the principal amount back at the end of the bond’s life (or maturity) or at the end of a dedicated period in which the interest amount is credited to your account.
Accretive in bonds or accretion refers to the gradual increase in value of a bond's principal over time due to the passage of time.
Businesses are inherently risky. It is the one thing that unites them across sectors and geographies. While organizations can't run without risks, they can mitigate them.
The government issues these bonds to raise debt money from the general public. It raises this money to meet its various expenditure requirements.
Companies need liquidity/money to fund their expansion plans. Issuing debt is one such way of raising funds.
When experienced investors choose the stock market instruments, they invest in multiple asset classes beyond equities. Although certain assets can yield higher returns, they swear by diversifying their investments within the stock market such that they are profitable in case one asset class goes through a bear cycle.
A Callable bond is a type of bond or debt security that allows the issuer of the bond to retain the privilege of redeeming it at some point before the date of maturity.
Bonds have become one of the most effective financial instruments to offer regular income to the holder without a massive risk of losing the principal amount.
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