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Understanding the characteristics Through Bonds

Bonds are debt securities, medium-long term that may be assigned to contain a promise from the issuing party to pay interest in return for a certain period and pay off the principal debt at the time specified for the bond buyer.

 Would be easier for investors to understand the terms of the bonds through the characteristics, including:

 Ø Nominal Value (Face Value) is the principal value of a bond that will be received by holders of bonds at the bond matures.

 

Ø Certificate (the Interest Rate) is the interest value will be accepted by the bondholders (usually bonds are coupon payments every 3 or 6 months) coupon bonds are expressed in annual percentages.

  Ø Due Date (Maturity) is the date on which the bondholders will receive principal payment or Par Value of bonds owned. The maturity date of the bonds ranged from 365 days to more than 5 years. Bonds which will mature within 1 year will be easier to predict, so it has a smaller risk than bonds with maturity period within 5 years. In general, the longer the maturity of a bond, the higher the coupon / her interest. 

 
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