Questions On Basics On Bonds

1380 Words Oct 7th, 2014 6 Pages
Basics on bonds
Naranchimeg Tumurbaatar
Webster University Abstract
The purpose of this paper is give idea to individuals what is investing, how it is beneficial to them, specifically concentrated on how bond works, how to approach the bond market, and what should consider when purchasing the bond, because thousands of people wondering how they invest their money, where they should invest, and how the investing process works. It will be very helpful for the individuals who are first time investors. Financial Paper: Bond Bond is basically IOU according to Joshua; when you purchase a bond, company or government borrow your money in return they will pay you back certain interest rate in length of the time on the agreement Company or government issue the bonds and enter into lawful agreement with individuals that promise to pay back principle (the amount of money they borrowed) by a specified date while give them opportunity to enjoy the interest payment (Joshua).
Reasons for investing bonds
Why people need to consider investing in bonds? What bonds can do for investors? Investors to built a less riskier and balanced return due in unpredictable market by investing expanded portfolio of stocks, bonds, and other assets. Bonds is like a base of the tree when stock is declined, because they give expected return in exact due date with no exception. Also some bonds can help for tax breaks. For example municipal bonds are federal tax exempt and may be free from some state…
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