Monday, April 17, 2017

March 23, 2017

Bonds & Stocks Notes

What do we have to know about bonds & stocks?

  • Bonds= Loans 
  • Stocks= You own 
What are bonds?
  • Bonds are loans, or IOU's, that represent debt that the government or a corporation must repay to an investor. 
  • Bond holder has NO OWNERSHIP of company. 
First: If a corporation issues & sells a bond?
  • It is liability 
  • It is asset 
If the interest rate falls the percent value of the bond INCREASES 
If the interest rate rises the percent value of the bond DECREASES

Stock owners can can earn a profit, the higher to dividend. 
  1. Dividends, portions of a corporation's profit, are paid out to stockholders. (The higher the corporate profit, the higher the dividend). 
  2. A capital gain is earned when a stockholder sells stock for more than he/she paid for it. A stockholder that sells stock at a lower price than the purchase price suffers a capital loss. 

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