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Posted by alfredo bates on December 22, 2006, 5:44 am
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There are certain things you must understand about bonds before you
start investing in them. Not understanding these things may cause you
to purchase the wrong bonds, at the wrong maturity date.
The three most important things that must be considered when purchasing
a bond include the par value, the maturity date, and the coupon rate.
The par value of a bond refers to the amount of money you will receive
when the bond reaches its maturity date. In other words, you will
receive your initial investment back when the bond reaches maturity.
The maturity date is of course the date that the bond will reach its
full value. On this date, you will receive your initial investment,
plus the interest that your money has earned.
Corporate and State and Local Government bonds can be 'called' before
they reach their maturity, at which time the corporation or issuing
Government will return your initial investment, along with the interest
that it has earned thus far. Federal bonds cannot be 'called.'...
http://investmentiiek.blogspot.com/
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