Stocks and Bonds
Some people are content to limit their investment programs to such safe investments as savings accounts and savings bonds. They take comfort in knowing that while the return from such investments may be small, it is steady and sure. Other people ek investments that involve higher risks. They understand that the amount of money an investment returns is frequently related to the amount of risk it involves. Becau they want to obtain the greatest possible return on each dollar invested, they are willing to take certain chances. Still another group of people want both the comfort of safe investments and the greater dollar return of high-risk investments. Accordingly, they prefer a program that has a balance of both safe and high-risk investments.
For the last two groups, the most popular types of high-risk investments are tho that involve curities. Securities, which is a general term for stocks and bonds, are sold by governments and corporations in order to rai large amounts of money.
There are three ways in which business that need a great deal of money for a long peri
od of time can obtain that money. They can go to a bank and apply for a long-term loan. They can u the profits of the business. But banks are often reluctant to lend large amounts for periods longer than one or two years. And profits are ordinarily not large enough to finance anything very expensive. Therefore whenever business or governments need financing for major projects or for growth they must rai the money through the sale of curities.
Bonds
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A bond is like a promissory note, except that it is issued either by a business or by a government unit such as a city, county, or state. Whey you buy a bond, you are really lending money to the government or business from which you buy it. In return, you receive from the ller a written promi to pay you a definite sum of money, plus interest, at a future date.
There are two types of bonds. Government bonds are issued by state and local governments to help pay for improvements such as streets, schools, and public buildings.
Corporate bonds are issued by business to rai money for expansion and growth.
The denomination is the sum of money that the bond reprents. This sum is printed on the bond. The interest rate is t at the time a bond is issued. It remains the same until the bond matures. The maturity date of a bond is also fixed. Bonds may be issued for such periods as 10, 20, or 30 years.
Suppo you bought a $1,000 bond at 6 percent interest for 20 years. Each year you would receive $60 in interest (6 percent of $1,000). The interest would probably be paid to you in two payments, $30 every six months. After 20 years, the bond would mature, and you would receive $1,000- the price you paid when you first bought the bond.
司法考试
Bonds may be either registered or bearer bonds. A registered bond is a bond that has the name of the owner recorded with the issuer of the bond. Interest is mailed directly to the person registered as the owner. A bearer bond is a bond who owner is presumed to be the person who has posssion of the bond. Bearer bonds are not registered. When interest payments are due on a bearer bond, its posssor clips a coupon from the bond
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Bonds are also classified according to the type of curity that backs them up. A mortgage bond is backed by the issuer’s pledge of buildings, land and equipment as curity. A debenture bond is backed only by the issuer’s promi to pay when the interest and principal are due.
1. 国家扶贫政策According to the text, which is considered the safest program of investment? Saving
2. The esntial difference between a registered bond and a bearer bond lies in that _________.
晨雾3. In terms of safeness, a mortgage bond is _safer than_______ a debenture bond.
4. Which can NOT be a feature of a bond?
5. We can infer from the passage that the safest form of bond, in theory, is _government bond with mortgage_.
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咖啡的功效与作用好处Stocks
As a bondholder you are a creditor of, or lender to, a business firm or government unit. As a stockholder, however, you are one of the owners of a corporation. Stock reprents a share of ownership in a corporation. A stockholder may own one share or many shares of a corporation’s stock, and each share may cost veral dollars or veral hundred dollars.
Upon purcha of a stock, a stockholder receives a stock certificate, a printed form that states the number of shares a person owns in a corporation. You can buy either common or preferred stock.
