and invests 50,000 in different bonds portfolio. It is a good idea that the investors’ diversify their capital in different currencies for example, USD, GBP, DKK, SEK, CAD, etc. Therefore, it is important to invest in a portfolio of bonds according to the country of origin. Another type of risk that the holder is facing is exchange rate fluctuations. In other words, in a default event the issuer fails to pay interest and principal. Please take into consideration that this is a debt obligation and if the issuer or the company is bankrupted, then the holder will lose the principal or capital invested and the regular payments. During the debt obligation the holder receives regular incomes and reduces the exposure of market risk by monitoring interest rates. At maturity date the issuer pays back the principal to the holder. A fixed–income security is a debt obligation or a loan in which the issuer of the debt pays a specified amount to the holder of the security in terms of fixed periodic payments known as the coupon. This book is designed to provide an overview and introduction to the Fixed–income securities industry.
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