An increase in the value of bonds may be due to improved economic
For example, an entity issued bonds with a nominal value of 1,000 pounds at the beginning of the fiscal year (Group A). After several months had passed, the same entity decided to issue another group of bonds (Group B), but with a higher nominal value of 1,500 pounds, for example. Conditions of the entity and increased confidence in it or the need to borrow a larger amount of money.Now the investor who wants to buy bonds from this entity Telegram Number Data has two options. The first is to buy Series B at the new price or to buy Series A from one of its holders at a value greater than its nominal value, meaning he may pay an amount greater than 1,000 pounds. Of course, the largest value is not determined arbitrarily, but there are factors and standards that are relied upon to estimate the value of the actual bonds. Important note: The previous example is for explanation and clarification only. Dealing with bonds and their actual evaluation is a process that contains many details that must be paid attention to.
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Especially before purchasing any bond at a value other than its nominal value. The fundamental difference between a bond and a stock is that the stock represents a share in the ownership of the company, while the bond is considered part of a loan granted to the issuing entity, whether governmental or private. The bondholder does not bear any risks when investing in bonds except in the event that the issuing party is unable to repay the bond or its interest. This is not the case with investing in stocks , which is subject to several risks, the most important of which is the decline in the market value of the stocks.
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