Bonds_F09 - Agenda Scores and Grades 4.0! 22 - 21.5! ! ! 33...

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Agenda • Exam #1 • Journal #1 • Bonds Scores and Grades 4.0 25 - 22.5 53 3.5 22 - 21.5 33 3.0 21- 20 75 2.5 19.5 - 19 55 2.0 18.5 - 17.5 43 1.5 17 - 16.5 18 1.0 16 -15 21 0.0 14.5 -10 27 0 20 40 60 80 4 3.5 3 2.5 2 1.5 1 0 Exam #1 Fall 09 Bonds - Chapter 14 in text • Types – Treasuries • Fed agencies – Municipals (state or local) – Corporate • Risk and Ratings • Special Characteristics • Why bonds? • Bond mistakes • So what is so complex? Terms • Purchase: • Interest: • Due Date: • Before Due Date: Savings Bonds EE I Purchase Interest Tax Notes: (more info @ savingsbond.gov)
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Bonds Type: Length of Time • Treasuries – Bill – Note – Bond – Agency • Municipals • Corporate A. Reward! $1,000 @ 5.2% = $52. B. RISK…. 1. Taxes $52. X .15 = $7.80 ~ $8.00 2. Inflation $1,000 x .03 = $30. $52.00 - $38.00 = $14.00 Risk Yield Low ___________________________High Bond Ratings • Moody’s Aaa Aa A Baa Ba • Standard and Poors AAA AA A BBB BB B Cumulative Default Rates by Rating Categories
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This note was uploaded on 10/17/2011 for the course ECON 101 taught by Professor Thompson during the Spring '11 term at Michigan State University.

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Bonds_F09 - Agenda Scores and Grades 4.0! 22 - 21.5! ! ! 33...

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