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When speaking about purchasing a fixed income investment, what is the coupon?
The rate on a CD that the issuer pays the investor annually until maturity.
What is Fixed Income?
Fixed Income is the general category that incorporates all debt instrument types. There are several different types of debt instruments that customers can purchase and they will be paid interest on that based on a set duration and yield.
What is the typical price of a bond? (Also known as on par.)
A par bond is priced at 100, or equal to the face value of the bond (or $1,000 per bond.)
What does the "Call" feature do?
If a bond is callable, that means the issuer has the option of “calling” the bond (paying the bond off early and voiding future interest payments) at preset times.
Where is it illegal to own just one guinea pig?
Switzerland, Switzerland prohibits the ownership of just one guinea pig. Since guinea pigs are such social creatures, one guinea pig would get lonely so having just one is considered animal abuse.
When speaking about fixed income, what is the maturity date?
The date on which the face value is to be repaid to you. This date also represents the date on which interest payments are made
Who are the majority of issues for fixed income?
The majority of issuers (sellers of fixed income) are made up of: US Government Securities (Treasuries), Municipalities, Government Agencies, and Corporations.
What is a discount bond?
A discount bond is priced below 100 (e.g., 98.8 or $988.00 per bond).
What do YTM, YTC, and YTW mean?
Yield to Maturity (YTM) - the average annual yield until maturity.
Yield to Worst (YTW) - the lowest possible annual yield on a bond factoring in things like call features, purchases above par, and/or pre-payment options.
Yield to Call (YTC) - the annual yield of a callable bond based on the call date.
What is the only part of the body that cant heal itself?
Your teeth
What are the purpose of ratings on bonds?
Indicates the quality of the bonds being offered. Bonds are rated by independent ratings agencies. TD Ameritrade offers bonds investment grade (Baa2/BBB) and higher.
Who issues CD's?
CDs are issued by banks and these banks will used the funds the customer deposits to facilitate their own loans, in exchange for an interest rate paid to the customer.
What is a premium bond?
A premium bond is priced above 100 (e.g., 104.827 or $1,048.27 per bond).
What are the 3 different types of Treasuries?
Bills, Notes, and Bonds!!!
What are the only fours words in the English language that end in "DOUS"?
Horrendous, tremendous, hazardous, and stupendous.
What is the minimum?
The minimum order quantity that the offering dealer will accept. (Typically 5 here at TD)
What benefit do brokered CD's offer?
Brokered CDs have the benefit of not paying a fee if the CD needs to be redeemed before maturity.
Are municipal bond taxed by the issued state?
Most states do not tax the income from municipal bonds issued in their own state, but may tax income from municipal bonds issued in other states. More importantly TD Ameritrade does not give tax advice.
What treasury has the shortest maturity?
T- Bills aka "Little Bill" have the shortest maturity, ranging anywhere from 4-52 weeks.
What is Scotland's national animal?
Scotland chose the unicorn as its national animal. In Celtic mythology, the fictional creature is connected with both chivalry and dominance as well as purity and innocence.
What is the yield?
Yield is the amount of interest that is earned from the investment. When fixed income is initially issued, the yield is determined by annual interest earned divided by the face value of the issue.
What are the highest quality of bonds offered?
Treasury bonds .....The government guarantee, however, only applies to timely payment of principal and interest earned if held to maturity, and these securities remain subject to market and interest rate risk if sold prior to maturity.
When looking at municipal bonds what is the difference between the "Original Maturity" and "Maturity"?
Original Maturity- The date on which the face value of the bonds is scheduled to be repaid to you.
Maturity- May differ from the original such as in the case of a a prerefunded bond, the issuer promises to pay the principal back at an earlier date than originally scheduled (e.g., original maturity 03-01/2029, prerefunded on 03-01-2019).
What is the yield?
Yield is the amount of interest that is earned from the investment.
What is the only planet to spin clockwise?
Venus