Answer to Question #299903 in Finance for moha

Question

Describe any 6 types of bonds that are used to source funds for enterprise. 

Answer 1

1. Investment-grade corporate bonds: These are bonds issued by firms or financing vehicles that have excellent balance sheets.

2. High-yield bonds: are issued by firms or financing vehicles with weak balance sheets.

3. Foreign bonds: The issuer of foreign-currency-denominated bonds offers to pay set interest and restore the principal in a different currency. When those payments are turned into dollars, the size of those payments is determined by exchange rates.

4. Mortgage-backed bonds: Unlike most other bonds, they don't profit from falling interest rates since their value reduces when the rate of mortgage prepayments rises.

5. Municipal bonds: Although interest is tax-free, not everyone can take use of it. To recompense for the taxes, taxable yields are higher.

6. Agency bonds: issued by federal agency