What economic factors influence corporate bond yields?

July 7, 2024 No Comments

A: The economic factors that influence corporate bond yields are interest rates, inflation, the yield curve and economic growth. All of these factors affect corporate bond yields and exert influence on each other. The pricing of corporate bond yields is a multivariable, dynamic process in

What are the biggest risks of fixed-income investing?

July 7, 2024 No Comments

A: The biggest risks of bonds and other fixed-income investments are interest rate risk, credit risk and inflation risk. There are other risks to bear in mind, such as the call risk, but they only apply in a limited number of situations. As a rule,

What are the differences between debt and equity markets?

July 7, 2024 No Comments

A: The basic differences between the debt and equity markets include the type of financial interest they represent, the way in which they generate profits for investors, how they are traded and their respective risk levels. Both debt securities and equity investments have the potential

What are the differences between preference shares and bonds?

July 7, 2024 No Comments

A: Although holders of preference shares and bonds are both entitled to regular distribution payments, preference shares do not have a maturity date and can continue in perpetuity, unlike bonds. Bondholders are entitled to the receipt of regular interest rate payments, while holders of preference

What are the main advantages of fixed income securities?

July 7, 2024 No Comments

A: Fixed income securities are commonly used to diversify an investor’s portfolio, as they reduce the overall risk of an asset allocation or investment strategy weighted heavily in the stock market. Fixed income securities such as corporate bonds, government bonds, preferred company stocks and certificates

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

July 7, 2024 No Comments

A: Few issues are more complicated, contentious and controversial in contemporary American politics than balancing the federal government’s budget. Those who argue in favor of a balanced budget offer many claims about the deleterious impacts of huge federal debt. Others counter that balanced budgets would

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

July 7, 2024 No Comments

A: It’s common for financial analysts and investment publications to refer to U.S. Treasury bonds (T-bonds) as risk-free investments. This designation is approximately true and, at the same time, misleading. Thanks to the Federal Reserves’ implicit backing of all Treasury Department obligations, there is virtually

What are the risks of investing in a bond?

July 7, 2024 No Comments

A: The most well-known risk in the bond market is interest rate risk – the risk that bond prices will fall as interest rates rise. By buying a bond, the bondholder has committed to receiving a fixed rate of return for a set period. Should the market

What assets are taxable and what assets are not taxable?

July 7, 2024 No Comments

A: Most types of income are taxable by the Internal Revenue Service (IRS). In fact, all income is taxable unless it is specifically mentioned in the Internal Revenue Code as not taxable. Some examples of taxable income include gains from stock accounts, real estate capital

What determines bond prices on the open market?

July 7, 2024 No Comments

A: One of the most basic concepts that investors should become familiar with is how bonds are priced. Bonds do not trade like stocks. The pricing mechanisms that cause changes in the bond market are not nearly as intuitive as seeing a stock or mutual

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