Finance

Securitization in a process in which income streams from various assets are pooled together, then sold off in slices to investors. Collateralized mortgage obligations (CMOs) are securitized products designed to generate returns above…

Most corporate bonds are issued with a fixed interest rate, payable to investors on an annual basis until maturity. Yield is a term that expresses the true rate of return for investors who purchase these bonds at variable prices. …

There are two ways to invest in a company: through stocks or bonds. Stocks represent equity or ownership and bonds represent a debt that must be repaid. Most companies issue bonds as a form of capital raising, especially because interest…

U.S. Treasury bonds are referred to as "risk-free" investments for their unique safety. The U.S. government finances itself with debt sold to investors as Treasurys. Federal government officials maintain the power to tax and "create" money…

There are two main ways to invest in a company. You can invest via bonds or stocks. Bonds represent debt for the company, and the company pays the bondholder interest for the loan. The rate of interest depends on the creditworthiness of the…

The interest rate on a bond is called the state rate. However, your actual return will vary based on how much you pay to purchase the bond. Features When a bond is initially issued, the company sets a par value and…

When bonds are issued, they are assigned a par value and a stated interest rate. However, bonds are traded like stocks, which means that the price you pay to buy a bond may not equal the par value. Regardless of the price you pay, the…

Acorporate bond is effectively a loan issued by a company. The corporation issues the bond at a par value and stated interest rate. These values are used to represent how much interest the company will pay. Usually, interest is paid…

Bonds are loans that are floated by companies and governments and bought by investors. Each bond has a par value, the amount the company will pay interest on, and a stated interest rate. However, bonds can be traded like stocks so you may…

The stated interest rate is a term used to describe the return on bonds. When a bond is issued, the stated interest rate determines how much interest will be paid based on the bond's par value. Bond Issuance When a…