While waiting for a plane recently you had the opportunity to meet Marcel, a recent college graduate.
Question:
While waiting for a plane recently you had the opportunity to meet Marcel, a recent college graduate. Once Marcel heard that you knew something about investing, he immediately began to ask you questions about bonds. Marcel indicated that from what he had heard from his friends, the stock market was overvalued and bonds were a safer place to invest. Marcel admitted he really did not know much about either stocks or bonds, but that he hoped to start saving so that he could purchase a house in the next five years. Answer the following questions in a way that will help Marcel learn about bond investment concepts.
Explain which bond features would be important for Marcel to consider. If Marcel thought that interest rates were going to rise, what type of bond should he purchase? Why? Describe at least five risks involved with investing in bonds.
StocksStocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
Step by Step Answer:
First Marcel should be aware of whether or not a bond is callable convertible extendible and putable If Marcel expects interest rates to rise he shoul...View the full answer
