Factors that influence rating of a bond Credit worthiness financial capacity

Factors that influence rating of a bond credit

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Factors that influence rating of a bond Credit worthiness, financial capacity, state of the economy, financial debt history, etc. Types of bonds: U.S. government, municipal, corporate bonds, and junk bonds Monitoring groups and regulating agencies Securities exchange commision- protects the public by monitoring stock markets and brokers and enforces the laws concerning the buying and selling of stocks Financial industry regulatory authority Investment strategies Securities (stocks and bonds) are generally avoided when for example, There is no liquidity Investor cannot afford to lose the capital The investor needs to have low risk reducing /lowering risk through diversification Stage in life considerations Capital gains tax: holding securities whose price has increased for more than 12
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months and one day before selling it will be taxed as ordinary income. With long term holding it will be taxed at the lower capital gains tax. Churning: high and frequent turnover of the account position by a stock broker Stop loss: a strategy by an investor to control the potential loss on an investment Circumstances under which investors may buy or sell their investments Long term investing, situations for cutting losses and when investors consider dollar-cost averaging. Dollar cost averaging 8.) MONEY MANAGEMENT and FINANCIAL PLANNING Determine personal net worth by subtracting liabilities from assets Assets (things owned with monetary value) - liabilities ($ owed) = net worth OR What a person owns minus what they owe equals what they are worth How life stages and inflation influence money management (budgets, spending, insurance needs, etc.) Financial plans (goals and priorities, life cycles, financial planners) Wills Taxes Kinds:sales, income tax, real estate. Etc. Form of payment (annual tax returns, upon purchase, etc.) Tax anticipation checks and prepaid cards, offered by some tax preparers, allow customers to pay upfront for tax preparation. The check is not a loan. A bank sets up a temporary account to receive the refund from the IRS. then the bank issues the customer a check or prepaid card minus the tax preparation fee and any other fees and closes the account Strategies for being a smart consumer Evaluating product warranties to determine need and value Why lowest price is not always the best value Problems associated w/impulse buying or being addicted to spending How advertising influences spending and increases the cost of products Housing Renting vs. owning Owning- tax deductibility of mortgage interest and building equity Renting- fewer responsibilities, no building equity Real estate as an investment Financial ownership
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The relationship b/w the amount of down payment and the amount of the monthly mortgage payments The higher the down payment, the lower the mortgage and the lower the mortgage payment Homeowners insurance
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