Finance Terminology - II
Finance Terminology Bonds: Bonds are product issued by corporate and government entities to finance and expand their projects. The issuer promises to pay interests annually or biannually to the investors and the principal amount on the maturity date. There are mainly two types of bonds: · Corporate Bond: These kinds of bonds are issued by companies are either can be investment grade or non-investment grade bond. Investment grade bonds are issued by stable companies with low risk of default so it assures you low interest while in case of non-investment grade bonds interest rates will be high but companies are not stable resulting in more risk of default. · Government Bond: These kinds of bonds are issued by cities, country and states to fund capital projects, such as building roads, schools and hospitals. Entities and Asset Classes: 1. Equities: Defined in previous Blog. Please refer Finance Terminology Part I. 2. Fixed-