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

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

July 7, 2024 No Comments

A: Most bonds typically make periodic payments, known as coupon payments, to the bondholder. A bond’s indenture, revealed when the purchaser buys the bond, will specify the the details of the coupon payments. Different companies will issue different bonds to raise financial capital, and the

Are money market accounts considered checking or savings?

July 7, 2024 No Comments

A: A: A money market account (MMA) is neither a checking account nor a savings account, though it does contain elements of both. Like a checking account, an MMA offers check-writing privileges, though they are limited to around three per month. Some MMAs also offer

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

July 7, 2024 No Comments

A: Bank guarantees and medium term notes (MTNs) are different types of instruments that serve different purposes for corporations. Bank guarantees are instruments issued by a bank or other lending institutions ensuring that the money owed by a debtor will be paid. In other words,

Calculate the total return of the municipal bond described below.

July 7, 2024 No Comments

A: Jane and Fabbio Salvatore have just discovered that a Fabulous Florence municipal bond will be offered to support a bridge development in Fabbio’s hometown in Florence, OH. They want to purchase the bond at $1,000, but end up buying the 10% bond at $1,020.

Can a bond have a negative yield?

July 7, 2024 No Comments

A: The return a bond provides to an investor is measured by its yield, which is quoted as a percentage. Current yield is a commonly quoted yield calculation used to evaluate the return on a bond for a one-year period. It only accounts for the interest,

Can a church issue a bond?

July 7, 2024 No Comments

A: The North American Securities Administrators Association (NASAA) has acknowledged that “church bonds” are allowed to be issued under certain guidelines. These bonds can be issued only by religious affiliates that are identified as being a “church”, “parish”, “mosque” or a “synagogue”, and can only

Can Private Corporations Issue Convertible Bonds?

July 7, 2024 No Comments

A: A convertible bond is a debt that may be converted into a predetermined amount of the underlying company’s equity at certain times during the bond’s life, usually at the discretion of the bondholder. The first step to answering this question requires defining the term “private corporation.” Many

Collateralized Mortgage Obligation vs. Collateralized Bond Obligation

July 7, 2024 No Comments

A: Both collateralized mortgage obligations (CMOs) and collateralized bond obligations (CBOs) are similar in that investors receive payments from a pool of underlying assets. The difference between these securities lies in the type of assets that provide cash flow to investors. What Is a Collateralized Mortgage

Common Examples of Marketable Securities

July 7, 2024 No Comments

A: Marketable securities are investments that can easily be bought, sold or traded on public exchanges. The high liquidity of marketable securities makes them very popular among individual and institutional investors. These types of investments can be debt securities or equity securities. Types of Marketable

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