Bonds FAQs

  1. What is the difference between Macaulay duration and modified duration?

  2. How is the Macaulay duration related to fixed income markets?

  3. What are the risks involved in a banker's acceptance?

  4. When is a bond's coupon rate and yield to maturity the same?

  5. What are the differences between preference shares and bonds?

  6. What is the difference between a bond's yield rate and its coupon rate?

  7. What economic factors influence corporate bond yields?

  8. How is investing in a corporate bond different from buying shares of the company's stock?

  9. What does it mean if a bond has a zero coupon rate?

  10. What is the difference between a bond's coupon rate and yield to maturity?

  11. What is the difference between par value and market value?

  12. What is the difference between par and no par value stock?

  13. How does a company decide whether it wants to engage in a leveraged buyout of another company?

  14. What are the accounting entries when a company issues a callable bond?

  15. How is the term 'accretive' used in fixed income investments?

  16. Are money market accounts for short-term investments a good idea?

  17. What are the most popular and useful measures of credit spread?

  18. Why do bond coupon rates vary so greatly?

  19. Is reclassification of a financial instrument ever permitted?

  20. What are some securities that have spot rates?

  21. Under what circumstances might an issuer redeem a callable bond?

  22. What are the advantages of investing in a callable bond?

  23. What risk factors should investors consider before purchasing a callable bond?

  24. How does an investor make money on a zero coupon bond?

  25. What are some examples of securities that can be found in a money market fund?

  26. Why is a premium usually paid on a callable bond?

  27. How can retail investors invest in commercial paper?

  28. What is the difference between par value and face value?

  29. How can the yield curve help me make investment decisions?

  30. Under what circumstances might a company decide to liquidate?

  31. What does the Macaulay duration indicate about a bond?

  32. What happens to the shares of a company that has been liquidated?

  33. What is the difference between yield to maturity and holding period return yield?

  34. What is Z-spread and option adjusted credit spread?

  35. What is a Z bond in a collateralized mortgage obligation (CMO)?

  36. Why do companies issue callable bonds?

  37. How are junk bonds regulated?

  38. Are stock investors technically creditors?

  39. Why do zero coupon bonds tend to be volatile?

  40. What are the full rights of creditors in cases of bankruptcy?

  41. How can you use a debt service coverage ratio (DSCR) to evaluate municipal bonds?

  42. How is convertible bond valuation different than traditional bond valuation?

  43. What are the advantages of using an effective interest rate figure?

  44. What are the pros and cons of operating on a balanced-budget?

  45. What is the relationship between the hurdle rate (MARR) and the Internal Rate of Return (IRR)?

  46. What is the rationale behind the effective interest rate?

  47. Can I use the current yield to compare a bond to an equity investment?

  48. What is the relationship between modified duration and interest rates?

  49. What are the risks associated with investing in a treasury bond?

  50. How were bonds and derivatives manipulated in the LIBOR scandal of 2012?

  51. What is the correlation between equity risk premium and risk?

  52. How is it possible for a rate to be entirely risk-free?

  53. How is the risk-free rate of interest used to calculate other types of interest rates or loans?

  54. What is the difference between a repurchase agreement and reverse repurchase agreement?

  55. What role did junk bonds play in the financial crisis of 2007-08?

  56. Which asset classes are the most risky?

  57. How is the interest rate on a treasury bond determined?

  58. Is variance good or bad for stock investors?

  59. Where did market segmentation theory come from?

  60. What does 100-plus accrued interest mean?

  61. What are the main disadvantages of fixed income securities?

  62. How is convexity used in risk management?

  63. What does market segmentation theory assume about interest rates?

  64. Why are treasury bond yields important to investors of other securities?

  65. What kind of securities should a risk-averse investor buy?

  66. Which factors most influence fixed income securities?

  67. How is the risk-free rate determined when calculating market risk premium?

  68. What types of investors are susceptible to interest rate risk?

  69. Is the market risk premium the same for stocks and bonds?

  70. What is the difference between fixed assets and current assets?

  71. Are closed end investments actively or passively managed?

  72. What are the characteristics of a marketable security?

  73. What is the difference between a collateralized debt obligation (CDO) and an asset backed security (ABS)?

  74. What are the biggest risks of fixed-income investing?

  75. Where on the Internet can I find yield curves over various periods?

  76. What does the yield curve actually predict?

  77. When is the best time to buy a fixed income security?

  78. How important is credit rating on a fixed income security?

  79. What are the differences between a treasury bond and a treasury note and a treasury bill (T-bill)?

  80. What are some common examples of marketable securities?

  81. How do investors calculate the present value of a future investment?

  82. Can individual investors profit from interest rate swaps?

  83. How do I compare one junk bond to another?

  84. What are the main advantages of fixed income securities?

  85. If interest rate swaps are based on two companies' different outlook on interest rates, can they be mutually beneficial?

  86. How did the LIBOR scandal affect interest rate swaps?

  87. Which investments have the highest historical returns?

  88. How is face value used to determine taxation?

  89. How do I calculate a discount rate over time, using Excel?

  90. Do interest rate swaps trade on the open market?

  91. What measures should a company take if its times interest earned ratio is too high?

  92. Can bond traders trade on interest rate swaps?

  93. What legal recourse do I have if the counterparty in a debenture agreement does not fulfill his or her end?

  94. How do I calculate yield in Excel?

  95. How do I calculate yield of an inflation adjusted bond?

  96. How does inflation affect fixed-income investments?

  97. What is the safest investment?

  98. Can investments be consumed immediately?

  99. How long has the U.S. run fiscal deficits?

  100. If caught, what implications does money laundering have on a business?

Hot Definitions
  1. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  2. Current Account

    The difference between a nation’s savings and its investment. The current account is defined as the sum of goods and services ...
  3. Liability

    Liabilities are defined as a company's legal debts or obligations that arise during the course of business operations.
  4. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Private Equity

    Private Equity is equity capital that is not quoted on a public exchange. Private equity consists of investors and funds ...
Trading Center