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

The difference between fixed and current assets

July 7, 2024 No Comments

A: Fixed assets, also known as property, plant and equipment (PP&E), are tangible assets that a company expects to use for more than one accounting period. They are part of the non-current assets of an entity, and are different from cash and other current assets

The Differences Between a Collateralized Debt Obligation (CDO) and an Asset Backed Security (ABS)

July 7, 2024 No Comments

A: An asset-backed security (ABS) is a security created by pooling non-mortgage assets that is then resold to investors. A collateralized debt obligation (CDO) is a complex type of ABS that can be based on non-mortgage assets, mortgage assets or both together. Understanding the Differences

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

July 7, 2024 No Comments

A: a. discount rate. b. 90-day Treasury bill rate. c. five-year Treasury note rate. d. federal funds rate. Answers: b The 90-day Treasury bill rate is used because there is no credit risk, and the maturity is so short that there is no liquidity or

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

July 7, 2024 No Comments

A: Once investors know the approximate due dates and yields of their holdings, they can do a few simple calculations in a spreadsheet or other program to calculate thier income. Here is a breakdown of the due dates for some common fixed-income sources: Bonds &

To what extent are utility stocks affected by changes in interest rates?

July 7, 2024 No Comments

A: Utility stocks are definitely subject to interest rate risk and can be significantly impacted by changes in interest rates. Competition With Bonds Utility firms can be adversely affected by rising interest rates in two ways. First, rising interest rates make investing in bonds more

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

July 7, 2024 No Comments

A: Money laundering is a multibillion dollar industry that impacts legitimate business interests by making it much more difficult for honest businesses to compete in the market since money launderers often provide products or services at less than market value. Where a financial institution or

Treasury Bond vs Treasury Note vs Treasury Bill

July 7, 2024 No Comments

A: The U.S. federal government offers three categories of fixed income securities to the buying public: Treasury bonds (T-bonds), Treasury notes (T-notes) and Treasury bills (T-bills). Each of these securities is issued with the full faith and credit of the U.S. government, and they are used

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?

July 7, 2024 No Comments

A: Simply put: yes, you will. The beauty of a fixed-income security is that the investor can expect to receive a certain amount of cash, provided the bond or debt instrument is held until maturity (and its issuer does not default). Most bonds pay interest

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