Non-Callable Bonds

Non-Callable Bonds

Non-Callable Bonds

Non-callable bonds are also known as non-redeemable. non-callable bonds can only be paid out at maturity. The issuer of a non-callable bond can’t call the bond prior to its date of maturity unless penalties are paid to security holders. It is different from a callable bond. (more…)
Equity vs Fixed Income

Equity vs Fixed Income

Equity vs Fixed Income

If a person wants to generate income or appreciation in the future he acquires an asset known as investment. An investment is always purchased to generate more in the future than you invest today. But there is always a risk associated with the investment. Investments instead of profits can also generate losses as they can lose value in the future. For example, you invest in a company and that company goes bankrupt. One can invest in these different types of investments such as bonds, stocks, mutual funds, exchange-traded funds, index funds, and options. This article aims to provide an overview of Equity vs Fixed Income. (more…)
Asset Allocation Fund

Asset Allocation Fund

Asset Allocation Fund

An investment strategy that balances the risk and rewards of an individual’s portfolio by apportioning it to other asset classes by taking into consideration individual goals, risk appetite, and investment horizon is referred to as asset allocation.  The fund that provides investors with a diversified portfolio of investments across various asset classes is called an asset allocation fund. The three main asset classes are equity, fixed income, and cash equivalents. (more…)
Bullet Bond Strategy

Bullet Bond Strategy

Bullet Bond Strategy

 Bullet Bond Strategy is a type of investment strategy in which an investor invests in various bonds for a specific time period that has the same maturity date and will able to redeem the total lump sum amount on the date of maturity. Under this strategy, it should be noted that various bonds are purchase at different times, but the maturity will be decided as same for all the bonds. (more…)
Investment Securities

Investment Securities

Investment Securities

Investment securities are financial assets that are tradable in financial markets such as equities and fixed income instruments. These are purchased to hold them for a longer period of investment. This is in contrast to securities that are purchased by broker-dealer or other financial intermediately for resale short-term speculations. Investment securities are subject to governance via article 8 of the Uniform Commercial Code (UCC). (more…)
CHEAPEST TO DELIVER

Cheapest to Deliver

Cheapest to Deliver

Cheapest to deliver is a method that is used to estimate which is the least expensive future contract for a seller to deliver to its buyer. The conversion factor is used to estimate the cheapest value. This conversion factor is generated by the Chicago Board of Trade (CBOT) and Chicago Mercantile Exchange (CME). Investors trading in futures contracts must be aware of the term cheapest to deliver and must gain a full understanding of this method. (more…)
Equity Swaps

Equity Swaps

Equity Swaps

An equity swap is a derivative contract between two parties that involves the exchange of one stream(leg) of equity-based cash flow linked to the performance of a stock or an equity index with another stream (leg) of fixed-income cash flows. These swaps are highly customizable and are traded over-the-counter. A party will enter into an equity swap with the objective of either obtaining equity return exposure for a period of time or hedge existing equity risk exposure for a period of time.  (more…)
Fixed-Income Security

Fixed Income Security

Fixed Income Security

Fixed Income Security is a type of debt instrument in which the issuer is liable to pay fixed income with a fixed interest rate to the investor. At the time of the purchase of these securities, a rate of interest is fixed, to be provided to the investor at the time of maturity. Under this type of instrument, the return is generally low because the risk associated which fixed-income security is very less, and because of this the return is also comparatively low. Fixed Income Security is mainly issued by the government, companies, and corporations to manage their cash flow. (more…)
Bearer Bonds

Bearer Bonds

Bearer Bonds

Bearer Bonds are the type of debt instrument which were introduced in the late 1800s by the U.S. government, in order to fund the reconstruction during the post-Civil War era. These are bonds that are not registered with any owner. Rather, the owner is someone who "bears" or has ownership of a bond and the interest will be transfer to that individual's account. These instruments were issued by governments, companies, and corporations to meet their capital requirement in a short period of time. (more…)
Callable Bond

Callable Bond

Callable Bond

Bonds are Fixed income security that pays income to the investor in the form of interest and principal at maturity. One such kind of bond is a Callable Bond. Callable bonds are bonds with embedded options wherein the issuer has the right to repurchase the bond back from the bondholder at a per specified price as stated in the bond indenture before the maturity of the bond. The bonds are not brought and held by the issuer they are canceled out immediately. (more…)