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Their IOU is only good until your loan’s term ends (i.e., the bond “matures”), and then they'll be expected to repay their loan in full. Many bonds are fixed-income investments, meaning that ...
Interest payments are the primary way bonds generate returns for investors.
While bonds tend to be safer than stocks and other market-based investments, you can still lose money investing in them. Here are some of the most common ways to lose money in a bond : Selling ...
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans, or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt ...
Bonds (fixed income securities more generally): investment-grade or junk (high-yield); government or corporate; short-term, intermediate, long-term; domestic, foreign, emerging markets; Cash and cash equivalents (e.g., deposit account, money market fund) Allocation among these three provides a starting point.
The risks affecting the return on a bond portfolio, as an example, include the overall level of the yield curve, the slope of the yield curve, and the credit spreads of the bonds in the portfolio. A portfolio manager may hold firm views on the ways in which these factors will change in the near future, so in three separate risk decisions he ...
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