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

Current yield vs yield to maturity

July 7, 2024 No Comments

A: Both the current yield and yield to maturity (YTM) formulas are methods of calculating the yield of a bond. However, these two methods of calculation have different applications depending on the goals of the investor. Bond Basics When a bond is issued, the issuing

Do convertible bonds have voting rights?

July 7, 2024 No Comments

A: Convertible bonds usually have no voting rights until they are converted. Even after conversion, they may not be granted voting rights. A convertible bond is a form of debt that features an embedded stock option allowing the convertible bondholder to convert his/her bond into

Do high interest rates hurt the performance of telecommunication stocks? If so, why?

July 7, 2024 No Comments

A: Conventional investing wisdom holds that certain types of equities have above-average sensitivity to rising interest rates, not unlike bonds. The common shares of utility companies, established oil companies and telecommunications companies (among others) become more bearish when talk of rate increases begins and investors

Do Preferred Shares Offer Companies a Tax Advantage?

July 7, 2024 No Comments

A: A preferred stock is a class of ownership in a corporation that provides a higher claim on its assets and earnings as compared to common stock. There is no direct tax advantage to the issuing of preferred shares when compared to other forms of financing such

Yield vs Interest Rate

July 7, 2024 No Comments

A: The main difference between yields and interest rates is that each term refers to different financial instruments. Yield commonly refers to the dividend, interest or return the investor receives from a security like a stock or bond, and is usually reported as an annual

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