2007-03-18 16:55:35 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
There's also interest rate risk on bonds.
i.e. if you want to sell a bond you own, and have a 5% bond, and similar bonds are now yielding 6%, you have to sell at a discount, to match the value of the 6% bond.
Similarly, if you had a 7% bond, you could sell it for a premium.
You can also hold to maturity, and receive face value.
2007-03-20 09:10:48 · answer #1 · answered by Quixotic 3 · 0⤊ 0⤋
Risk on bond is the risk of default in servicing or retiring
Bonds which are below investment grade are the ones that carry the risk. They are also called junk bonds.
Bonds are supposed to be the more conservative portion of most people’s portfolio – there to produce income and offset the volatility of stocks.
However, if you’re not careful investing in bonds can be as risky as any high-flying tech stock.
2007-03-18 20:43:31 · answer #2 · answered by surez 3 · 0⤊ 0⤋
As somebody pointedout earlier I am sure that you are a expert in the field of finance and investing. Then why are asking all these questions in this forum? Not certainly to know the right answer. You must be a commerce lecturer or some teacher. You want to compare our answers with that of your students. Why not answer some questions instead for a change.
2007-03-22 06:26:40 · answer #3 · answered by arpita 3 · 0⤊ 0⤋
dont sign with out reading the bond agreement completly
2007-03-18 17:02:20 · answer #4 · answered by vinod_lovesbodybuilding 3 · 0⤊ 1⤋