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Unformatted text preview: N. Sheflin INVESTMENT GAME – Part 4 Bonds SOLVED Time to get conservative with Bonds – traditional investment for “widows and orphans” and, if you want to speculate on interest rates, gamblers. IN INVESTOPEDIA , http://www.investopedia.com/university/ look at the sections on: Bond & Debt Basics (beware of cookies ). Answer the questions at the end of this document out loud to your roommate or dog. Homework, and final exam questions on this material will be coming. Nothing to do In VIRTUAL STOCK EXCHANGE – it doesn’t deal with bonds. HOW IS YOUR PORTFOLIO DOING? Determine your paper gain/loss and explain the causes. Compare with the performance of the S&P 500. PROBLEMS? If VSE is behaving oddly (or even if not), it’s a good idea to keep a paper record of all transactions (purchases/sales). At worst, you can hand in a corrected version of your actions at the end of the game. QUESTIONS hide answers, try explaining to your cat ; look up in invest-faq, investor words, etc; ask in class; DO 1. look at the interactive bond listing page at http://www.moneychimp.com/articles/bonds/bondpage.htm 2. and the page at http://www.investinginbonds.com/learnmore.asp?catid=3&id=45 DEFINITIONS • Bond IOU – issued by governments (Federal and State and Local) and corporations to raise funds; debt; generally pay fixed income • coupon – the FIXED $ payment most bonds pay • par value – the face value of a bond – what you will get back at maturity...
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- Spring '09
- Interest Rates