Differences in contractual provisions, and in the underlying strength of the companies backing the bonds, lead to major differences in bonds risks, prices, and expected returns. It is important to understand how bond markets actually function and what the appropriate terminology is.
Choose one question to answer:
a. What are some of the factors you should consider when buying a bond?
b. How are Treasury bonds bought?
d. What factors determine a bond's market price?
e. What role do transaction costs play in bond transactions?
f. What is meant by buying bonds indirectly?
g. How can you find the current price of a bond?