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What are Junk Bonds

Junk bonds, also known as high-yield bonds, are nothing more than speculative-grade (low-rated or unrated) bonds. Before 1977, almost all junk bonds were "fallen angels, " that is, bonds issued by firms that originally had investment-grade ratings but that had since been downgraded. In 1977, however, firms began to issue "original-issue junk."

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How Funds Are Sold

Most mutual funds have an underwriter that has exclusive rights to distribute shares to investors. Mutual funds are generally marketed to the public either directly by the fund underwriter or indirectly through brokers acting on behalf of the underwriter. Direct marketed funds are sold through the mail, various offices of the fund, over the phone, and, increasingly, over the Internet. Investors contact the fund directly to purchase shares. For example, if you look at the financial pages of your local newspaper, you will see several advertisements for funds, along with toll-free phone numbers that you can call to receive a fund’s prospectus and an application to open an account with the fund.

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What are Present Value and Future Value

calculation of present value in financial decisions Finance is all about time and risk. It’s basically a study of how people make decisions regarding the allocation of resources over time and the handling of risks of them. Playing with it requires some very fundamental techniques and strategies, which are all indispensable if not enough for success in financial markets. And the idea of present value is one of the most important that will help you value financial assets over time thus making choices between current resources and future gains.

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