Sentences with phrase «capital value of a bond»

If those rates rise, that will drive down the capital value of bonds, offsetting their higher interest payments.

Not exact matches

(If you write down the value of this bond — and the resulting future payment obligation — your capital level increases.)

And so the roughly 20 % drop in Deutsche's 7.5 % perpetual CoCo that has happened in just a few weeks is a manifestation of a fear not only that a missed payment will come to pass, but that Deutsche Bank could also write down the value of these bonds if its capital falls below a certain level.

«People purchase bond funds when they are looking for a safe way to get returns,» said Charles C. Scott, president of Pelleton Capital Management in Scottsdale, Ariz. «However, bond funds can be somewhat risky when interest rates rise, and the bond funds lose some of their principal value.»

One example: a corporate bond relative value strategy that examines the capital structure of a particular issuer and discovers that short - term credit spreads are too high relative to long - term credit spreads.

These are mutual bond funds which invest in the stocks of many well - situated companies with the strong potential for huge capital gains and value funds.

While a money market fund or deposit account will protect the nominal value of your cash, you are missing out on a chance to grow it with interest from bonds or capital appreciation from stocks.

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Topics will include the nature of the financial environment (domestic and international), the time value of money, valuation of stocks and bonds, risk and return, capital budgeting and the capital structure decision.

For example, a total return of 20 % means the security increased by 20 % of its original value due to a price increase, distribution of dividends (if a stock), coupons (if a bond) or capital gains (if a fund).

Now there's a trade - off: the buyer of your old bond will receive more interest, but at maturity he'll collect only the face value of $ 1,000 and suffer a capital loss of almost $ 36.

While a money market fund or deposit account will protect the nominal value of your cash, you are missing out on a chance to grow it with interest from bonds or capital appreciation from stocks.

Because the amount of market discount, two points, is less than the de minimis amount (which in this case is 2.5 points, or 0.25 percent of the face value of a bond times the number of years between the bond's acquisition and its maturity), the market discount is considered to be zero and the difference between purchase price and sales price or redemption is generally treated as a capital gain upon disposition or redemption.

If the OID did not increase the holder's tax basis during the period the bond is outstanding, a sale of the bond for an amount in excess of $ 4,628 would produce taxable capital gain to the bondholder, even if the increase in value arose solely as a result of the accretion of OID.

Capital Gain An increase in the value of an asset such as stocks, bonds, mutual funds and real estate between the time the asset was purchased and the time the asset was sold.

One example: a corporate bond relative value strategy that examines the capital structure of a particular issuer and discovers that short - term credit spreads are too high relative to long - term credit spreads.

The high degree of balance sheet leverage for certain bond insurers means that small changes in the values of these portfolios have a large impact on the bond insurers» capital base.

The Capital Base included in CPR is also likely to be overstated because the investment assets of the bond insurers consist primarily of bond insurer guaranteed obligations that are valued inclusive of the guarantee, when they should be valued on an unwrapped basis.

Naked option NASD NASDAQ National Association of Securities Dealers National exchanges National Market System National Medallion Signature Guarantee National Securities Clearing Cooperation (NSCC) National securities exchange NAV Negotiable Negotiated market Negotiated underwriting Net Asset Value Net capital Net capital ratio Net interest cost Net investment income Net revenue pledge Net proceeds Net worth New issue Nine - bond rule NMS No - load fund Nominal quote Nominal yield Non-cumulative Nonparticipating preferred stock Nonrecourse loan Non-systematic risk Non-tax-qualified annuity Notice of public offering Notice of sale NYSE NYSE Composite Index

Giving away appreciated securities such as stocks, bonds, or mutual fund shares offers an additional tax benefit: You can generally take a tax deduction for the full market value of the securities donated and also avoid paying tax on the capital gains on the investment.

With an estimated duration of about 8 years on $ 3 trillion of bond holdings, every 100 basis point move in long - term interest rates can be expected to alter the value of the Fed's holdings by about $ 240 billion — roughly four times the amount of capital reported on the Fed's consolidated balance sheet.

Capital assets, such as stocks, bonds and real estate, provide an ongoing source of value that can be measured using the present value of future cash flows technique.

This nugget of tax law states that if you purchase a bond at a discount and the discount is equal to or greater than a quarter point per year until maturity, then the gain you realize at redemption of the bond (par value minus purchase price) will be taxed as ordinary income, not as capital gains.

Today's negative real rates incent us to favor real capital, which provides positive long - term real expected returns, as a long - term store of value over cash and government bonds, which currently pay negative real rates.

@Malcolm: When you buy an individual bond that is trading at a premium to its par value (or a basket of premium bonds in a mutual or ETF structure), you will receive additional interest to compensate you for the capital loss realized when the bond matures at its lower par value.

Michael Burry is a value investor notable for being one of the first, if not the first, to short sub-prime mortgage bonds in his fund, Scion Capital.

Learn the basics of Stocks, Bonds, Real Estate, Index Funds, Mutual Funds, Banks and Lending, Time Value of Money, Compound Interest, Risk and Return, Financial Leverage, Balance Sheets, Credit Cards, and Private Equity / Venture Capital

The Barclays Capital High Yield Very Liquid Index includes publicly issued U.S. dollar denominated, non-investment grade, fixed - rate, taxable corporate bonds that have a remaining maturity of at least one year, regardless of optionality, are rated high - yield (Ba1 / BB + / BB + or below) using the middle rating of Moody's, S&P, and Fitch, respectively (before July 1, 2005, the lower of Moody's and S&P was used), and have $ 600 million or more of outstanding face value.

If you hold a premium bond to maturity, your return will consist of two parts: 1) the interest coupons you collect and 2) the capital loss that occurs as the price of the bond gradually falls back to par value at maturity.

That said, I do not currently see enough value in treasury bond ownership nor am I inclined to seek price gains that correspond to twice (200 %) the daily performance of the Barclays Capital U.S. 7 - 10 Year Treasury Index.

Bonds are sometimes also used by sophisticated investors during times of stock market volatility to preserve the capital values of their investments.

Yesterday I ran a post on Dr. Michael Burry, the value investor who was one of the first, if not the first, to figure out how to short sub-prime mortgage bonds in his fund, Scion Capital.

The WSJ reports that he and Oaktree Capital Management hold a «little less than $ 500M» face value of MGM bonds out of approximately $ 7B of the non-bank debt.

Stocks - Through your gift of appreciated securities, stocks, or bonds to the Center, you may avoid some or all of the capital gains tax by deducting their full current market value as a charitable contribution.

In the last three years we have worked on about 60 debt capital market transactions with a value of over $ 100 billion and are a recognized as market leader in High yield bonds, Yankee bonds, Eurobonds, covenanted Eurobonds, Euro and US Private Placements and EMTN offerings.