Podcast Beta
Questions and Answers
บริษัทเมื่อออกหุ้นสามารถเรียกเก็บเงินได้จากใคร?
นักลงทุน
การชำระดอกเบี้ยรายปีในตลาดหุ้นเกิดจากอะไร?
ตราสารหนี้
หลักสูตรที่ออกในรูปของหุ้นต้องชำระดอกเบี้ยอย่างไร?
ดอกเบี้ยคูปอง
หุ้นที่มีการชำระดอกเบี้ยคูปองทุก 6 เดือนเป็นรูปแบบการชำระดอกเบี้ยอย่างไร?
Signup and view all the answers
เมื่อหุ้นมีการชำระดอกเบี้ยครั้งละครั้งต่อปีจะเรียกว่าอย่างไร?
Signup and view all the answers
เมื่อหุ้นมีการชำระดอกเบี้ยทุก 3 เดือนเรียกว่า?
Signup and view all the answers
คำว่า coupon payments ในบทความหมายถึงอะไร?
Signup and view all the answers
Yield to Maturity (YTM) หมายถึงอะไร?
Signup and view all the answers
Maturity period หมายถึงอะไร?
Signup and view all the answers
อัตราดอกเบี้ยสำหรับตราสารหนี้มักจะเหมือนที่เหล่านั้นได้รับมาจากใคร?
Signup and view all the answers
เมื่ออัตราดอกเบี้ยสูงขึ้น สิ่งที่เกิดขึ้นกับความน่าสนใจของตราสารหนี้คืออะไร?
Signup and view all the answers
ความยาวของระยะเวลาครบกำหนดที่พบบ่อยสำหรับตราสารหนี้อยู่ในช่วงไหน?
Signup and view all the answers
Study Notes
Financial Investment: Understanding Corporate Bonds, Coupon Payments, Annual Return, Maturity Period, and Interest Rates
Financial investments involve putting money into various financial instruments with the expectation of earning a positive return. One type of investment is corporate bonds, which are loans made by investors to corporations. These borrowed funds help companies finance their operations or expand their business activities. In this article, we will discuss various aspects of investing in corporate bonds, including coupon payments, annual returns, maturity periods, and interest rates.
Corporate Bonds
Corporate bonds represent debt securities issued by corporations to raise capital. When you purchase a bond from a company, you're essentially lending them money, allowing them to access more cash to grow or continue operating. Companies issue bonds as part of a capital structure, alongside other types like stocks and equity. Bondholders receive regular interest payments based on the bond's face value until it reaches its maturity date, at which point they get repaid the initial amount lent back to the corporation.
Coupon Payments
Coupon payments refer to periodic interest payments made by the issuer of a bond to the holder of the bond. These payments can be structured in several ways, depending on the terms of the bond. For example, some bonds pay semi-annually, while others may have quarterly or annual payments. Regardless of the frequency, these coupon payments are typically expressed as a percentage of the bond's face value (e.g., 6% per year). As a result, bonds serve as fixed income products because the interest rate remains constant throughout the life of the bond.
Annual Return
The annual return on a corporate bond represents the total yield obtained from holding the bond to maturity, comprising both the coupon payment and any price appreciation or depreciation during the investment period. This includes changes due to shifts in market interest rates affecting the bond's value over time. To calculate the annual return, one could look at the bond's Yield to Maturity (YTM), which estimates the annualized compounded rate of return if held until maturity. It takes into account future cash flows and discounts them back using current prevailing interest rates. A higher YTM indicates better expected performance compared to other comparable bonds.
Maturity Period
Maturity period refers to the length of time before the principal amount of a bond becomes due and must be paid back to the investor in full. Common maturity durations range between two years and ten years; however, longer maturities do exist. Shorter maturity periods offer lower yields in exchange for less risk, while longer-term bonds offer higher yields with inherently higher risks of default.
Interest Rates
Interest rates play a crucial role in determining whether investing in a corporate bond makes sense or not. Higher interest rates tend to decrease the appeal of most bonds since it means you can earn a similar rate of return by buying other assets, such as certificates of deposit (CDs). During periods of high inflation, investors often prefer corporate bonds offering higher coupons because they protect against inflationary erosion of purchasing power. However, when interest rates decrease, there is generally increased demand for bonds because their yields become relatively more attractive again.
In summary, understanding the intricacies of corporate bonds, coupon payments, annual returns, maturity periods, and interest rates is essential for making informed decisions in the world of financial investments. Just remember - every investment comes with its own set of risks and rewards, so always do your homework before diving in!
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on corporate bonds, coupon payments, annual returns, maturity periods, and interest rates with this quiz. Learn about the intricacies of investing in corporate bonds and how different factors impact investment decisions.
