Bonds FAQs

  1. Which financial instruments have par values?

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

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

  4. How can I calculate the Macaulay duration of a zero-coupon bond?

  5. How do I calculate the Macaulay duration of a zero-coupon bond in Excel?

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

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

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

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

  10. What economic factors influence corporate bond yields?

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

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

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

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

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

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

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

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

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

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

  21. Why do bond coupon rates vary so greatly?

  22. What are some securities that have spot rates?

  23. Is reclassification of a financial instrument ever permitted?

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

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

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

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

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

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

  30. What are some examples of debt instruments?

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

  32. How can retail investors invest in commercial paper?

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

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

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

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

  37. How do I convert a spot rate to a forward rate?

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

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

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

  41. Why do companies issue callable bonds?

  42. How are junk bonds regulated?

  43. Are stock investors technically creditors?

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

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

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

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

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

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

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

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

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

  53. What is the difference between compounding interest and simple interest?

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

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

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

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

  58. What is the difference between a term and open repurchase agreement?

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

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

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

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

  63. Which asset classes are the most risky?

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

  65. How do you find accrued interest on a bond?

  66. Is variance good or bad for stock investors?

  67. Where did market segmentation theory come from?

  68. What does 100-plus accrued interest mean?

  69. How is convexity used in risk management?

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

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

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

  73. Which factors most influence fixed income securities?

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

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

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

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

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

  79. Are closed end investments actively or passively managed?

  80. What are the characteristics of a marketable security?

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

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

  83. What does the yield curve actually predict?

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

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

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

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

  88. What are some common examples of marketable securities?

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

  90. Can individual investors profit from interest rate swaps?

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

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

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

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

  95. Which investments have the highest historical returns?

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

  97. How is face value used to determine taxation?

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

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

  100. Can bond traders trade on interest rate swaps?

Hot Definitions
  1. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  2. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  3. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  4. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  5. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  6. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
Trading Center