Callable bonds offer attractive yields, but this allure comes with a significant caveat: prepayment risk. Callable bonds grant the issuer the right to "call" or redeem the bond before its scheduled maturity date. This shortens the bond's lifespan and
Risk and return
Credit Default Swaps (CDS): Why It Matters, How It Works, Types, Benefits, and Risks
Credit Default Swaps (CDS) are financial contracts that act as insurance against the default of a specific bond or loan. By purchasing a CDS, you insure against the issuer failing to meet its debt obligations. This mechanism has evolved significantly
Market Risk: What It Is, Types, and How to It
Imagine yourself a seasoned investor, meticulously building a portfolio focused on the stability of fixed-income securities. You might picture a serene harbor, a safe haven from the turbulent equities markets. However, the ever-present threat of
Risk-Free Rate: Why It Matters, Why It Uses Treasury as Standard, What It Means for Your Investments
The investment world can seem complex, filled with uncertainty and the constant pursuit of higher returns. However, understanding a fundamental concept – the risk-free rate – provides a crucial starting point, especially for fixed-income investors.
Capital Appreciation: Enhancing Your Fixed-Income Returns for Long-Term Growth
Imagine your retirement fund steadily gaining value, fueled by consistent returns. This growth, achieved through careful investment strategies, is essential for achieving your long-term financial aspirations.Capital appreciation describes the
Real Yield: How It Works, Factors Affecting It, & Boosting Your Fixed-Income Portfolio
Imagine this: You've been meticulously saving for retirement, diligently investing in a diversified portfolio. You're confident in your strategy, carefully balancing risk and reward. However, a lurking threat could undermine your hard work: