Financial Assets & Investments: A summary
4 kinds of financial asset Loans: Lender provides principal, a sum of money. Borrower pays back principal in chunks, plus an agreed % extra. The agreed % is the interest rate. Bonds: Owning one entitles you to pay-outs of an agreed regular sum, which may vary according to pre-defined market circumstances. The bond can be sold. Their “yield” is the % of the total they pay out per unit time. They are valued by comparing the yield to interest rates.
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Tue, May
16th
2023
