Maturity dateGenerally, this is when you will receive repayment of what you loaned an issuer (assuming the bond doesn't have any call or redemption features). If you want or need to sell a bond before its maturity date, you may be able to sell it to someone else, though there is no...
redemption amountpayment guaranteesregional governmentlocal authoritySummary This chapter describes bond, which is loan by one party to another party. The issuer gives guarantee to the investor that he or she will pay interest on the loan at regular intervals and repay the loan at a specified time...
Corporations and governmental entities issue bonds in order to borrow money from investors. The bonds require the issuer to pay interest and repay the principal on appointed dates. Bond defeasance is a method used to pay out a bond's cash flows using substitute bonds. Issuers often use bond de...
One popular strategy to mitigate those risks is to build a bond ladder, where your fixed-income investments are spread across a range of maturity dates (for instance, instead of investing in only five-year bonds, you would make a series of smaller investments in three-, four- and five-year...
Answer to: What is a bond? Why might a company elect to sell bonds rather than borrow from a bank? By signing up, you'll get thousands of...
A bond is a type of loan granted to the government or a company by an investor which has a fixed rate of return. They are used by governments and companies to facilitate the borrowing of money from the general public to fund various projects....
Redemption Before Maturity Some bonds contain a feature that allows the issuer to redeem, or call, the debt before maturity. The issuer can exercise the call feature on a set date -- the call date -- for a predetermined price, usually a little more than the face value. A call is mandat...
In some instances, the face value is the same as the original purchase price. However, in other instances, the face value is the current value of the bond, either at the time of the call or the point of maturity. Always clarify this point before purchasing a callable bond. ...
is made plus the redemption amount of the bond’s face value. Since the bond was issued and purchased for a discount value of $925, a bondholder will receive $1,000 face value on the maturity date. In this case, an investor that wants to measure the yield of this bond can calculate ...
on a Series I bond can fall to is zero, which is the floor placed on the bond by the Treasury. If the inflation rate is so negative that it would take away more than the fixed rate, the composite rate will be set at zero. The formula for calculating the composite rate is given as...