Discuss how bonds are sold on the secondary market.
Answer to relevant QuestionsWhat are Treasury bonds? Describe their key characteristics. Sandy has a choice between purchasing $ 5,000 in Treasury bonds paying 7% interest or purchasing $ 5,000 in BB rated corporate bonds with a coupon rate of 9.2%. What is the risk premium on the BB rated corporate bonds? Emma is considering purchasing bonds with a par value of $ 10,000. The bonds have an annual coupon rate of 8% and six years to maturity. The bonds are priced at $ 9,550. If Emma requires a 10% return, should she buy these ...Why do investors invest in index funds? Discuss the popularity of index fund investment as it relates to expenses. What tax advantage do index funds offer relative to other types of mutual funds? Explain how Lipper indexes are used.
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