Convertible bonds represent a debt of the issuing corporation and are commonly designated by the rate of interest paid and the year of maturity. The price at which a convertible is traded is quoted as a percentage of $1,000 (or
In most cases, convertible preferred stocks are similar to convertible bonds and respond accordingly in the market place. However, there are some differences between the two.In most instances, a preferred stock is a perpetual instrument and, as such, does not
A convertible trading on its investment value tends to be insensitive to movements in the underlying common stock. Briefly defined, the investment value of a convertible is its future value, discounted by time to maturity and rate of interest.
Current yield is a financial term used in reference to bonds and other fixed-income securities. It is a simple ratio of the annual interest/dividend payment to the current market price of the security, expressed as a percentage.
The yield to maturity of a bond or other fixed-income security is the rate of return earned by an investor who buys the bond today at the market price, assuming that the bond will be held until maturity, and that all coupon and principal payments will be made on schedule.
Convertibles are an interesting hybrid of stocks and bonds. There are a lot of questions that an investor new to this market might ask. This article discusses some valuable questions to which we think you need to know the answers.
Travelers going to a foreign country usually try to pick up some of the language before they arrive. The same should be true for investors, as the language of certain markets is unique to those markets. Here’s a primer on some key Convertible Bond terms.
Risk typically increases with potential return. There are, however, some investments that historically have provided larger than expected returns in proportion to the risk of the securities involved. Convertibles fall into this category.
Convertibles are a niche investment that are, unfortunately, on the outskirts of most investors’ radar screens. A quick primer, however, might help change that.