Bonds FAQs

  1. Why is my bond worth less than face value?

  2. How does face value differ from the price of a bond?

  3. How are treasury bills taxed?

  4. What is the lowest capitalization rate before an investment becomes unprofitable?

  5. How are treasury bill interest rates determined?

  6. How do treasury bill prices affect other investments?

  7. How does quantitative easing in the U.S. affect the bond market?

  8. How does preferred stock differ from company issued bonds?

  9. What's the difference between r-squared and correlation?

  10. What is the difference between yield to maturity and the yield to call?

  11. What is the difference between the yield of stock and the yield of a bond?

  12. What is the debt ratio for an FHA loan?

  13. How do I calculate yield to maturity in Excel?

  14. How do I calculate yield to maturity of a zero coupon bond?

  15. What is face value and how is it determined?

  16. What is the difference between yield and rate of return?

  17. How is a debenture stock different from a regular debenture?

  18. Do high interest rates hurt the performance of telecommunication stocks? If so, why?

  19. Why should I keep records on my tax-exempt bond transactions?

  20. How long can I hold my HH/H Bonds and still earn interest?

  21. How do I sign up for a TreasuryDirect account?

  22. What are the maturity terms for Treasury bonds?

  23. What is the difference between EE and I Bonds?

  24. What causes a bond's price to rise?

  25. How does a bond's coupon interest rate affect its price?

  26. What is the Education Savings Bond Program?

  27. How are savings bonds taxed?

  28. Does a good credit rating guarantee repayment?

  29. How long are credit ratings valid?

  30. What is a triple tax-free municipal bond?

  31. How does TARP affect the economy?

  32. What is "whoops" and how did it come to refer to one of the biggest municipal bond defaults in history?

  33. How does the money from the interest on my bond get to me?

  34. If a client has a very low risk tolerance, all of the following might be suitable investments EXCEPT:

  35. How are bonds rated?

  36. What is the difference between the bond market and the stock market?

  37. Why are most bonds traded on the secondary market "over the counter"?

  38. Why is debt issued in both temporary and permanent forms?

  39. Are U.S. banks authorized to issue bank guarantees or medium term notes (MTNs)?

  40. What are G7 bonds?

  41. In a corporate liquidation, why are unpaid taxes and wages paid before general creditors but after secured bondholders?

  42. The interest rate used to define the “risk-free” rate of return is the

  43. Why might a bond agreement limit the amount of assets that the firm can lease?

  44. Which is TRUE about Treasury bond futures?

  45. What is the difference between yields and interest rates?

  46. What is an absolute rate?

  47. All of the following statements about convertible bonds are FALSE EXCEPT:

  48. An investor is in the 36% tax bracket and holds municipal bonds with an 8% yield-to-maturity. What is the equivalent taxable yield?

  49. What is the difference between a gilt edged bond and a regular bond?

  50. Which of the following BEST describes the requirements for advertisements of new municipal securities issues?

  51. How do companies like Moody's rate bonds?

  52. What is "hot money"?

  53. How do I use a barbell strategy?

  54. What is a wild-card play?

  55. Why are the bid prices of T-bills higher than the ask prices? Aren't bids supposed to be lower than ask prices?

  56. Why do commercial bills have higher yields than T-bills?

  57. If the price of the bond falls, does that mean the company won't pay me the par value?

  58. Who are the key players in the bond market?

  59. Does issuing preferred shares offer a tax advantage for corporations?

  60. Why do low interest rates cause investors to shy away from the bond market?

  61. Where does the stock come from when convertible bonds are converted to stock?

  62. Why do longer term CDs pay a higher rate than the short-term CDs?

  63. If different bond markets use different day-count conventions, how do I know which one is used in any particular market?

  64. Where can I get bond market quotes?

  65. If I buy a $1,000 bond with a coupon of 10% and a maturity in 10 years, will I receive $100 each year regardless of what the yield is?

  66. My family owns an old railroad bond from 1938. Is there any way to find out whether this still has any value?

  67. Why doesn't the price of a callable bond exceed its call price when interest rates are falling?

  68. A corporate bond I own has just been called by the issuer. How can a company legally take away my bond? How do these call provisions work?

  69. I have discovered that a bond I am interested in has a sinking fund. What does this mean?

  70. Are high-yield bonds better investments than low-yield bonds?

  71. Can a bond be traded over-the-counter?

  72. Can a bond have a negative yield?

  73. What constitutes an "intention to call a debt instrument before maturity" for tax purposes?

  74. What are "I Bonds" and how can I buy them?

  75. Is there a limit to how many stocks and/or bonds an interested investor can buy?

  76. What does investment grade mean?

  77. What are 'death spiral' convertible bonds?

  78. Where can I buy government bonds?

  79. Can private corporations issue convertible bonds?

  80. How should I estimate my income from fixed sources like bonds, CDs and stocks?

  81. What does it mean when a bond has a put option?

  82. What is accrued interest, and why do I have to pay it when I buy a bond?

  83. What is the difference between convertible and reverse convertible bonds?

  84. What is a stripped bond?

  85. What are the advantages and disadvantages of buying stocks instead of bonds?

  86. Can a church issue a bond?

  87. What is the difference between a zero-coupon bond and a regular bond?

  88. Calculate the total return of the municipal bond described below.

  89. How does a person gain from an investment?

  90. Are certificates of deposit a kind of bond?

  91. Is there such a thing as a foolproof stock-picking strategy?

  92. Why do companies issue debt and bonds? Can't they just borrow from the bank?

  93. How does an investor make money on bonds?

  94. What are the risks of investing in a bond?

  95. What is a convertible bond?

  96. Do convertible bonds have voting rights?

  97. Why do companies issue 100-year bonds?

  98. What is the quickest, easiest and cheapest way to buy a bond?

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