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

July 7, 2024 No Comments

A: When you buy a regular coupon bond, you are entitled to a coupon, which is typically paid at regular intervals, and the face value of the bond (the amount you initially invested), which is typically paid upon maturity. Most coupons are paid on a

How is a corporate bond taxed?

July 7, 2024 No Comments

A: A corporate bond is taxed through the interest earned on the bond, through capital gains or losses earned in the early sale of the bond, and through an original issue discount. The aggregate taxes owed on each of these components adds up to equal

How do I calculate the expected return of my portfolio in Excel?

July 7, 2024 No Comments

A: The expected return of your portfolio can be calculated using Microsoft Excel if you know the expected return rates of all the investments in the portfolio. Using the total value of your portfolio, the value of each individual investment, and its respective return rate,

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

July 7, 2024 No Comments

A: The resulting Macaulay duration of a zero-coupon bond is equal to the time to maturity of the bond. A zero-coupon bond is a type of fixed-income security that does not pay interest on the principal amount. However, to compensate for the lack of coupon

How do I calculate yield in Excel?

July 7, 2024 No Comments

A: When assessing the profitability of bonds, analysts use a concept called yield to determine the amount of income that a given investment can be expected to generate each year. Yield is prospective and should not be confused with rate of return, which refers to

How are municipal bonds taxed?

July 7, 2024 No Comments

A: Municipal bonds are commonly tax-free at the federal level, but can be taxable at state or local income tax levels or under certain circumstances. An Overview of Municipal Bonds A municipal bond, also known as a muni, is a debt security used to fund

How do I calculate yield of an inflation adjusted bond?

July 7, 2024 No Comments

A: Standard yield calculation methods still apply to inflation-adjusted bonds, only investors are more likely to pay attention to real yield with an inflation-adjusted bond. Inflation-adjusted bonds have yields that appear to be lower than non-adjusted (nominal) bonds. The bond yields for inflation-adjusted bonds are

How Are Savings Bonds Taxed?

July 7, 2024 No Comments

A: According to Treasury Direct, interest from EE U.S. savings bonds is taxed at the federal level but not at the state or local levels for income. This interest is also taxed through federal and state estate, gift and excise taxes. The interest is the amount that a bond can

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

July 7, 2024 No Comments

A: Zero-coupon bonds do not have re-occurring interest payments, which makes their yield to maturity calculations different from bonds with a coupon rate. Most time value of money formulas require some interest rate figures for each point in time. This makes the yield to maturity

How are the Equity Market and Fixed-Income Market Different?

July 7, 2024 No Comments

A: The major differences between equity and fixed income markets are the way they make profits for investors, the manner in which they are traded, their representation of financial interest and their levels of risk. Equity Markets Equity markets involve the purchase and sales of

All Rights Reserved