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Blue Chip Stock
the stock of a large, well-established and financially sound company that has
operated for many years
Owners of bonds are
Debt holders, creditors and issuer
Bonds usually have
variable or fixed interest payments
Bonds are correlated with
inverse interest rates
T/F Bonds have maturity rates
T
,Bonds must be
paid back in full or risk default
Which bond is issued by companies?
Corporate bonds
Companies issue these rather than bank loans
Corporate bonds
Corporate bonds
offer lower interest rates
municipal bonds are
issued by states and municipalities
T/F Municipal bonds are tax free coupon income
T
Government Bonds
Certificates sold by the government to raise money with the guarantee that the
purchaser will be paid back later (with interest)
, Agency Bonds
bonds issued by US government agencies
Which coupon is given at discount to par value?
zero-coupon
zero coupon bond
generate a return when bond holder is paid in full face when bond matures
convertible bonds
Bonds that can be converted into common stock at the bondholder's option
callable bonds
bonds that the issuing company can redeem (buy back) at a stated dollar
amount prior to maturity
Puttable bonds
Are able to be sell back to company before it matures