Therefore, be sure to refer all the articles related to investing in bonds written on this website to have a clear
view on bond investments.
So what you get
back on a bond investment if you hold it to maturity is interest based on the face amount of the bond and, at maturity, repayment of the face amount.
«Risk - parity funds use leverage to try to increase returns
on bond investments so they more closely resemble returns of stocks.
If you are also interested in investing in bonds and want to know more about bonds, then we recommend you to read the articles on «basic information on bonds» and «beginners
guide on bond investment» articles that we have published earlier in this website.
As a result of the intervention by the Federal Reserve and the U.S. Treasury, even the bondholders of Bear Stearns stand to receive 100 % repayment of both interest and
principal on their bond investments.
The returning or receiving portions of the bond premium reduce the account balance of the premium on the bond payable for the bond seller or the account balance of the
premium on the bond investment for the bond buyer.
If the investor could only reinvest at 4 % (say, because market returns fell after the bonds were issued), the investor's actual
return on the bond investment would be lower than expected.
Returns
on bond investments is independent of the company's performance so the investors are looking at fixed returns during the investment term.