Law 421 Week 4 Bonds Research Paper

A stock is a unit of ownership within a company and is known as a form of investment, it is important to understand what a stock is to be able to understand that the stock market in its simplest form is a platform where investors buy stocks and bonds as well as sell them. (Also known as trades.) Investors will usually hire a stockbroker who will make purchases of stock on behalf of their customers’ requests and offer their professional advice.

The financial or economic interest is an important motivating factor for employees; however, when the gap in salaries is high, it could result in dissatisfaction and affect the business economically.

The stock market is a great way to buy part of a company & gain or loose money depending on how the company is making money buy buying a share. “The stock market is owning a small piece of the company; the stock market is owning a piece of a business” (Christie 5). Therefore, investing in the stocks is a great idea when prices are high. Furthermore, it is a hard job to keep up with everything needed to know for the job. Investors and brokers are the one who do the buying

The “Stock Market” is a term that actually describes several markets such as the New York Stock Exchange NASDAQ, where the stocks of companies are traded. Shares in a company are sold and the shareholders then become part owners of the company. Offering shares of stock raises money for continued research and development of company products or services.

Stocks, which allows investors  to own a percentage in a company, or in other words own

There are many forms of business insurance options that protect your business. If you are like many business owners, then you have quite a few. You may have commercial general liability insurance, workers’ compensation insurance, and commercial property insurance. However, do you have surety bonds to protect your business from non-performing contractors?

The world of stock is very broad. According to Investopedia, a stock is “a share in the

The U.S. Treasury bond is a low interest way for the government to borrow money. The bond, along with Treasury notes and bills, form the Securities which the Federal government borrows from lenders for a set amount of time. Issued by the Department of the Public Debt, a subset of the US Treasury, they are usually issued in 30-year maturities which pay interest twice yearly. Because the debt obligation is backed by the tax-generating, money printing, and understandably trusted government of the United States, bonds are generally considered to be a safe or virtually no-risk investment. Thanks to this low risk attribute however, bonds are regarded as very low-yield security, which is exactly why it is a good instrument for the United States government to employ, as long as it can turn a relatively decent profit on the initial investment. According to the September 30th, 2014 report of Monthly Statement of the Public Debt of the United States, the amount of Treasury Bonds outstanding totaled $8,167,759 million, I’ll call it roughly $8.2 trillion. This number composes the majority of the combined $12.7 trillion of US Treasury securities outstanding. These securities outstanding are also known as the national debt. The numbers listed above, and throughout this paper will disregard debt being owed to intra-governmental holdings of the US, as bonds make up a minuscule (in comparison, only $7.6 million) fraction of what they

Series EE bonds cannot be bought or sold in secondary market. These bonds have a guarantee from the U.S. government to at least double in value over the first term of the bond. The first term usually lasts for 20 years, but most EE bonds have an interest-paying life that extends an additional 10 years past that term. Interest income from EE bonds are exempt from state and local taxes, and coupon rates are assigned based on a certain percentage value of long-term Treasury rates. Much like EE bonds, series I bonds are non-marketable. Unlike EE bonds, they do not come with a guarantee to at least double in value over the initial term of the bond. Instead, I bonds come with a fixed coupon rate and receive an additional inflation-adjusted interest rate that is adjusted semi-annually. Stocks are a shared ownership of a company. Stocks are a claim on that company's assets and earnings. The more stocks you buy from a company the more of that company you own. Once you buy a stock you become a shareholder and you also receive a stock certificate. You can also sell your stock on the stock market. So if your own a stock while the company grows your share is more valuable which allows you to make a profit off of

Buying these bonds make them more expensive and makes them less attractive to invest. These allow those companies that have sold their bonds to use the cash to lend to individuals or invest in other companies. So if banks and insurance companies are lenient on lending money to individuals the interest rate will fall and increase spending. The end result is hopefully that the economy will recover, and the central bank will sell its bonds and destroy the cash it receives so in the long term there will no extra cash created. This method reduces bond yield on government debts and increase money supply of cash of commercial banks (bbc,2014).

It provides an evaluation of the bond issuer’s financial strength and ability to pay back the bond’s principle and interest. The bond rating also provides investors with some sense of security when investing in a particular firm. A higher bond rating implies a lower likelihood for the firm to default. Investors would feel more secured investing in such a bond, thus demanding a relatively lower rate of return. As such, high rated bonds enable the issuer to enjoy a lower cost of borrowing. A lower bond rating, on the other hand, serves as a negative signal to investors on the firm’s ability to repay debt obligations.

Stocks are considered an equity investment. So if someone or a company invest in a stock, they have an ownership stake in the corporation that issued it, or offered it for sale. Stocks are kind of like pieces of the corporate pie. When you buy and share stocks you own a slice of the company. So why do people buy stock? The corporation’s stockholder or shareholder sometimes involves millions of people and companies. They all have equity in the company as I referred to earlier, or they own a fraction proportion as a whole. They buy stocks because they expect to profit when there company gains profit. There are two different type of stocks; common and preferred stock. Common stock is the most common form of stock. With having ownership of a common stock, a person can exercise their right to vote on corporate decisions. This is the most distinct difference

When an organization issues a bond, it makes a commitment to you (investor) that it will make regular (quarterly, biannually, or yearly) payment of the interest at a specified rate on the total amount it borrowed from you (face amount) until the maturity date of the bond when it will repay the principal. This simply means that when you invest in bonds you start earning interest regularly until the maturity date of the bond when the issuer of the bond pays back the principle (money borrowed). Because of the facts that you get paid interest regularly and the principle upon the maturity of the bond, this investment instrument is often termed as a fixed income security.

Stocks are the smallest part of ownership of a corporation. It represents partial ownership. For example you have a shop worth of Tk.10000. Now if you divide the ownership of the shop in 100 parts then every part will be worth of 100tk. Now each of the part is called a share/stock. Now if you buy 10 Part/share, from that 100 part then you are partially an owner of the shop/firm/company.

Bonds are instrument of indebtedness of the bond issuer to the holder. A bond is can also be defined as a debt security under which conditions the issuer owes the holder debt which comes with conditions and there is an obligation to pay interest and repay the principal at a later date when the bond matures. Sometimes interest, maybe payable at fixed intervals, for example semiannual, monthly, annually. Bonds usually are negotiable and this simply means that ownership of the instrument can be transferred in the secondary market.