1) A bond is a debt investment where an investor loans money to an entity for a defined period at a fixed or floating interest rate. Bonds pay periodic interest payments and repay the principal at maturity.
2) There are various types of bonds including callable/putable bonds which allow early redemption, and convertible bonds which can be exchanged for stock.
3) Bond prices are inversely related to interest rates so they carry risks like interest rate risk, reinvestment risk, credit risk, and call risk which could impact the bond value. Various factors like ratings influence the credit risk.
This presentation provides readers with an introduction to bonds and their many characteristics. Topics discussed such as types of bonds, bond trading, valuing bonds and much more are highlighted in this presentation and can be further discussed on our site www.finpipe.com.
This presentation provides readers with an introduction to bonds and their many characteristics. Topics discussed such as types of bonds, bond trading, valuing bonds and much more are highlighted in this presentation and can be further discussed on our site www.finpipe.com.
A bond is a (written and signed promise)Ā debt investmentĀ in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable orĀ fixed interest rate (Coupon Rate).Ā
A bond is a (written and signed promise)Ā debt investmentĀ in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable orĀ fixed interest rate (Coupon Rate).Ā
What are bonds. elements of bonds. FACE VALUE. bondholders. dividend rate. yield rate. coupon dates. maturity date.
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INVESTING IN STOCKS AND BONDSWhy Consider BondsBond.docxmariuse18nolet
Ā
INVESTING IN
STOCKS AND BONDS
Why Consider Bonds?
Bonds reduce risk through diversification.
Bonds produce steady income.
Bonds can be a safe investment if held to maturity.
Your Rights as a Bondholder
Bondholders are creditors
Bond indenture
Protective covenants
Payment Characteristics of Bonds
Face value: The amount the issuer pays to redeem the bond
It is usually $1,000 for corporate bonds.
Coupon interest payments:
Most bonds have a fixed rate of return, which are the interest payments that are made every 6 months.
The amount of the payment is determined by multiplying the bondās coupon rate by the face value of $1,000.
Example: An 8% bond pays $80 in interest per year (0.08 Ć $1,000) divided into two payments of $40 semiannually.
Retirement Methods
Redeemed at maturity
Call provision
Sinking fund provision
Convertible bonds can be converted into common stock.
Corporate Bonds
Corporate bonds - allow firms to borrow money, are a major source of funding.
Denominations in $1000.
Secured bond ā backed by collateral.
Unsecured bond ā a debenture.
Hierarchy of bonds ā subordinated debentures are low on the list.
Government-Issued Bonds
U.S. Treasury Securities
U.S. Agency Bonds
Conventional
Mortgage-backed
Municipal Bonds
General obligation (GO) bonds
Revenue bonds
Special Types of U.S. Treasury Bonds
U.S. Treasury Strips
Inflation-Indexed Bonds
Intended to lessen price risk of bonds
The coupon rate is not changed.
The redemption value is adjusted periodically to reflect inflation. Example: If annual inflation is 3%, the redemption value is increased to $1,030.
Munisā Income Tax Advantage
Example:
Muni Yield = 5.91% and Tax rate = 28% (0.28)
FTEY = 5.91/(1.00 ā 0.28)
= 5.91/0.72 = 8.21%
Compare to yields on taxable bonds and choose the bond with the highest yield.
Special Situation Bonds
Zero Coupon Bonds
Junk bonds
Bond Ratings ā A Measure
of Riskiness
Moodyās and Standard & Poorās provide ratings on corporate and municipal bonds.
Ratings involve a judgment about a bondās future risk potential.
Default risk ā ability to repay principal.
Inability to meet interest obligations.
The lower the rating, the higher the rate of return demanded by investors.
Safest bonds receive AAA, D is extremely risky.
Expected Return from Bonds
Current yield (CY): annual interest divided by current price
Example:
Bond price (P) = $900
Annual coupon interest (I) = $120
The current yield calculation:
CY = I/P = $120/$900 = 0.1333 or 13.3%
The advantage of this calculation is that it is easy.
The disadvantage is that ignores maturity.
Yield to Maturity (YTM)
Yield to maturity is the return you would earn by buying a bond today and holding it until it is redeemed by the issuer.
Formula (approximation)
YTM = [ I + (1,000 ā P)/N]/ [(P + 1,000)/2]
Example: I = 120, P = 900, N = 5
YTM = [120+(1,000 ā 900)/5]/ [(900 + 1,000)/2]
= [120 + 20]/ [950]
= 140/950 = 0.1474 or 14.74%
YTM Example..contd.
.
BONDS, FEATURES OF BONDS, BOND VALUATION, MEASURING YIELD, ASSESSING RISK, TYPES OF LONG- TERM DEBT INSTRUMENTS, SERIAL BONDS, TYPES OF RISK, SEMI- ANNUAL BONDS, YIELD TO CALL, YIELD TO MATURITY, DEFAULT RISK & FACTORS AFFECTING DEFAULT RISK & BOND RATINGS, etc.
Debt - Basics of Debt and Fixed Income BFSI academy
Ā
Basics of Bond
Characteristics of Bond
Indenture , Covenants
Secured | Unsecured
Bond Markets
Categories of Bonds
Bond calculations
Callable , Putable Bonds
Securitisation , structured debt
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What website can I sell pi coins securely.DOT TECH
Ā
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Ā
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
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We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
what is the future of Pi Network currency.DOT TECH
Ā
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
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how can I sell pi coins after successfully completing KYCDOT TECH
Ā
Pi coins is not launched yet in any exchange š± this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAYĀ you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ā„ļø
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
Ā
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
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In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
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Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
2. Learning
What is a Bond ?
Deļ¬nitions
Types of Bonds-
Callability/Putability &
Convertibility
Bond Analysis- The
Risk Perspective
3. What is a Bond-?
A debt investmentĀ in which anĀ investor loans money to
an entity (corporate or governmental) that borrows the
funds for a deļ¬ned period of time at a ļ¬xed/
ļ¬oatingĀ interest rate. Bonds are used by companies,
municipalities, states and governments to ļ¬nance a
variety of projects and activities. Bonds are commonly
referred to as ļ¬xed-income securities.
Bonds pay ļ¬xed /ļ¬oating coupon (interest) payments at
ļ¬xed intervals (usually every 6 months) and pay the par
value at maturity.
4. Deļ¬nitions
Par or Face Value -
The amount of money that is paid to the
bondholders at maturity. It also generally
represents the amount of money borrowed by the
bond issuer.
Coupon Rate -
The coupon rate, which is generally ļ¬xed,
determines the periodic coupon or interest
payments. It is expressed as a percentage of the
bond's face value. It also represents the interest
cost of the bond to the issuer.
5. Deļ¬nitions
Coupon Payments -
The coupon payments represent the periodic interest
payments from the bond issuer to the bondholder. The
annual coupon payment is calculated by multiplying the
coupon rate by the bond's face value. Since most bonds pay
interest semiannually, generally one half of the annual
coupon is paid to the bondholders every six months.
Maturity Date -
The maturity date represents the date on which the bond
matures, i.e., the date on which the face value is repaid. The
last coupon payment is also paid on the maturity date.
6. Deļ¬nitions
Original Maturity -
The time from when the bond was issued until its maturity
date.
Remaining Maturity -
The time currently remaining until the maturity date.
Call Date -
For bonds which are callable, i.e., bonds which can be
redeemed by the issuer prior to maturity, the call date
represents the earliest date at which the bond can be called.
7. Deļ¬nitions
Call Price -
The amount of money the issuer has to pay to call
a callable bond (there is a premium for calling the
bond early). When a bond ļ¬rst becomes callable, i.
e., on the call date, the call price is often set to
equal the face value plus one year's interest.
Required Return -
The rate of return that investors currently require
on a bond.
8. Deļ¬nitions
Yield to Maturity -
YTM is the measure of a bonds rate of return that
considers both interest income and capital gain
and loss
It is the bonds, Internal or required rate of return
This required rate of return can be calculated when
the current price and cash ļ¬ows[ Interest and par
value] associated with the bond are known
9. Deļ¬nitions
Market Value- A Bond may be traded ina stock
exchange. The price at which it is currently sold
or bought is referred to as the market value.
Market value may be different from the Par value
or the maturity Value.
Redemption Value-At the end of maturity the
borrowed sum must be refunded. The amount of
money paid at the time of maturity is referred to
as redemption value. Normally bonds are
redeemable at par, but they can also be
redeemed at premium or discount.
10. Current Yield
YTM is not the same as CY
Current yield is the annual interest divided
by the bonds current value
Current yield only considers the annual
interest and ignores any capital gain or
loss
11. Call ability of Bonds
A bond that can be redeemed by the issuer prior
to its maturity. Usually a premium is paid to the
bond owner when the bond is called.
Also known as a "redeemable bond". Ā
The main cause of a call is a decline in interest
rates. If interest rates have declined since a
company ļ¬rst issued the bonds,Ā it will likely want
to reļ¬nanceĀ this debt at a lower rate of interest.
Ā The company will callĀ its current bonds and
reissue them at a lower rate of interest.
12. Call ability of bonds
The call premium is somewhatĀ of a penalty paid
by the issuer to the bondholders for the early
redemption
Call Provision-A provision on a bond or other
ļ¬xed-income instrument that allows the original
issuer to repurchase and retireĀ the bonds.Ā If
there is a call provision in place, it will typically
come with a time window under which the bond
can be called,Ā and a speciļ¬c price to be paid to
bondholders andĀ any accrued interest are
deļ¬ned
13. Putability of Bonds
PUT Provisions-The opposite of a callable
bond, a bond with a put provision allows
the bondholder to redeem the bond at par
value with the issuer at a speciļ¬ed point
before maturity. Investors might choose to
do this if interest rates increase after the
bond was issued. The bond will restrict
the dates when this can be done. These
bonds are quite rare.
14. Types of Bonds
Zeros-Bonds that pay only PAR value at maturity
and no coupon payments.
Euro Bonds-Bonds denominated in one currency
and sold in another currency.
Example - suppose Disney decides to sell $1,
000 bonds in France. These are U.S.
denominated bonds trading in a foreign country.
Why do this?
If borrowing rates are lower in France
15. Zero Coupon Bond-IDBI[1992]
Also called Deep Discount bonds, Zero Interest
Bonds
They are issued at a discount to the face value ,
hence the name, deep discount bonds
Do Not carry a rate of Interest. It provides for a
payment of a lump sum amount at a future date
in exchange for the current price of the bond
The difference between the face value and the
purchase price of the Bond is the YTM for the
investor.
16. Example-Zero Coupon Bonds
A company may issue a pure discount
Bond of Rs 1000 face value at Rs 520
today for a period of 5 years
PV = CFt / (1+r)t
PV= 520
CF= Face Value = Rs 1000
T= Maturity= 5 years
Yield/r= 14%
17. Types of Bonds
Security
Collateral ā secured by ļ¬nancial securities
Mortgage ā secured by real property, normally
land or buildings
Debentures ā unsecured
Notes ā unsecured debt with original maturity
less than 10 years
18. Convertibility of Bonds
Many corporate bonds are convertible
bonds
These bonds can be exchanged for some
speciļ¬ed amount of common or preferred
stock in the issuing company.
At the time of issue, the terms of
conversion will be outlined, including the
times, prices, and conditions under which
it can occur
19. Convertibility of Bonds
Most convertible bonds are also callable.
This means, in effect, that the company
can force bondholders to convert their
bonds into stock (called "forced
conversion").
Convertibility affects the performance of
the bond in certain ways
20. Convertibility of Bonds
First and foremost, convertible bonds tend to
have lower interest rates than non-convertibles
because they also accrue value as the price of
the underlying stock rises
Therefore, convertible bonds offer some of the
beneļ¬ts of both stocks and bonds
Convertibles earn interest even when the stock is
trading down or sideways, but when the stock
prices rises, the value of the convertible
increases.
22. The Bond Indenture
Contract between the company and the
bondholders and includes
The basic terms of the bonds
The total amount of bonds issued
A description of property used as security, if
applicable
Call provisions
Restrictive covenants if any-Capital Structure,
asset sales etc.
26. Example
Suppose you lend Rs. 100 today for a
promise to be repaid Rs. 105 at the end of
a year. The Rate of interest is 5 %,
However assume that prices over the next
year are assumed to rise 6 %, your money
has appreciated in Value by 5 %, but the
inļ¬ation rate is 6 % means that you have
actually suffered a loss of 1 %, ur interest
rate should have matched the inļ¬ation rate
therefore to cover this risk of loss of
purchasing power.
27. Interest Rate Risk
Price Risk
Change in price due to changes in
interest rates
Long-term bonds have more price risk
than short-term bonds
Reinvestment Rate Risk
Uncertainty concerning rates at which
cash ļ¬ows can be reinvested
28. Price Risk
Bond prices are inversely related to
interest rates, so if interest rates increase,
the price of the bond will decrease
The interest rate on a bond is set at the
time it is issued. Generally, the coupon will
reļ¬ect interest rates at the time of
issuance.
29. Price Risk
However, if interest rates increase, people will be
unwilling to purchase the bonds in the secondary
market at the earlier rate
For example, if the coupon is set at 6% and
interest rates in the market are at 7%, the interest
rate on the bond is well below what you could
get from a different investment. Therefore, the
price of the bond will decrease For this reason, it
can be risky to buy long-term bonds during
periods of low interest rates.
30. Reinvestment Risk
A drop in the interest rates causes a decline in
the expected income from investing interim
coupon payments
Example: Suppose you purchase a bond @ 8 %-
Par Value- Rs. 1000 today, the semi annual
coupon that you obtain shall be Rs.40, you can
reinvest the same @ 8 % if the interest rates
have not declined, but if the interest rates during
such period decline to @ 6%, the reinvestment
income will decline from Rs.1.60[ Rs.40*.04] to
Rs.1.20[Rs. 40 *0.03]
31. Bond prices fall with
a
rise in interest rates
and rise with a fall in
interest rates
32. Credit Risk
Just as individuals occasionally default on
their loans or mortgages, some
organizations that issue bonds
occasionally default on their obligations.
If this is the case, the remaining value of
your investment can be lost.
Government Bonds carry a lower credit
risk than corporate bonds
33. Credit Risk
Deļ¬nitely the return is much more in a
corporate bond as compared to a
government bond
There are Bond investment agencies that
evaluate the quality of the bonds and rank
them in categories according to the
relative probability of default, this helps
the investor in assessing the credit risk-
AAA is the best,, D - Bonds that have been
defaulted.
34. Ratings given by credit agencies for Bonds
Agency Highest
Safety
High
Safety
Moderate
Safety
Inadequate
Safety
High Risk
CRISIL AAA AA BBB BB B
CARE LAAA LAA LBBB LBB LB
35. Call Risk
When a bond is issued, it will be either callable
or non-callable
A callable bond is one in which the company can
require the bondholder to sell the bond back to
the company. Buying back outstanding bonds is
called "redeeming" or "calling".
When issued, the bond will explain when it can
be redeemed and what the price will be.
When a bond ļ¬rst becomes callable, i.e., on the call date, the
call price is often set to equal the face value plus one year's
interest.
36. Call Risk
A company will often call a bond if it is paying a
higher coupon than the current market interest
rates
Basically, the company can reissue the same
bonds at a lower interest rate, saving them some
amount on all the coupon payments; this
process is called "refunding
callable bonds will carry something called call
protection. This means that there is some period
of time during which the bond cannot be called.
37. Marketability Risk
Bonds are mostly not traded in secondary
markets, especially low rated bonds and
are therefore subject to Marketability Risk
For these Bonds the investor may have to
lose substantially while selling them as
the buyers expect a higher premium.