Stocks and Bonds

April 3, 2017

Stock and Bonds

·      Stocks you own

·      Bonds are loans, or IOUs, that represents debt that the government or a corporation must repay to an investor, the bond holder no ownership

Bonds

·      How are they determined

-   First: if a corporation issues and then sells a bond; this is a liability for the corporation and an asset for the buyer.

      ·      If nominal interest rate falls-value of the bond increases

      ·      If the nominal interest rises – then the value decreases

Stocks

·      Earn money by

   Dividends- which are portions of a corporations profits ,are paid out to stockholders (interest)

•   The higher the corporation profit, the higher the dividend
•   A capital gain- is earned when a stockholder sells stocks for more than he or she paid for it.
•   A stockholder that sells stocks at a lower price than the purchase price suffers a capital loss

BELOW WILL HELP OVERVIEW THIS COURSE