Differences in contractual provisions and in the underlying strength of the comp

Question

Differences in contractual provisions and in the underlying strength of the companies that issue bonds lead to significant differences in risks, prices, and expected returns. It is important to understand how bond markets function and the related terminology.

Visit one of these websites and find information about a bond that has been issued by a company in which you have interest:

You can choose AMAZON of any company

http://finra-markets.morningstar.com/BondCenter/

http://finance.yahoo.com/bonds

Http://www.nyse.com (Click on Products, click on Bonds on the right side of the window, and then click on Bond Directory.)

1. Copy the quotation of one bond. Present the quotation in the posting.

2. Explain the information that is contained in the bond quotation

Explanation / Answer

1. "Bond" is a Fixed Rate Bond offered by us with a defined maturity date, which shall be considered to be a deposit for a fixed term.
"Bond Holder" means "you" that is any one of the individuals who have a Bond with us.
"Maturity Date" means the final day of the fixed term of the Bond as per  our offer.

2. Opening a Bond
2.1 The fixed term of Bond will begin on the date we process your funds and will mature on the Maturity Date. For this , the date on which we process your funds implies a) in the case of deposits made by a cheque, the date on which we present the cheque for payment; and b) in case of deposits made by way of transfer from a maturing bond or other account held with us, the date on which we transfer the funds from the maturing bond or other account.

3. Paying money into a Bond
3.1 The minimum and the maximum deposit for the Bond is as defined in the terms of the Bond offering that is published at the time the offer is made.
3.2 Once a bond has been opened, no more deposits may be paid into it.
3.3 An Investment Confirmation Certificate will be given shortly after opening the Bond. A Bond Statement will be issued annually , and upon closure of the Bond.

3.3 We reserve an absolute right to refuse to accept a payment of any deposit for your Bond and decline your application.

4. Operating your Bond
4.1 No withdrawals may be made from the Bond before Maturity Date except in the specific circumstances set out in these Additional Terms and Conditions.
4.2 You must carefully check your Investment Confirmation Certificate and Bond statements . If you think that there is any error you must inform us immediately so that we can correct any mistakes.
4.3 To avoid fraud, customers are reminded that all the security information should never be written down.

4.4 We shall not be obliged to recognise the interest or claim of any person other than a Bond Holder (or in the event of the death, their duly appointed personal representatives, ) with respect of funds held in your Bond. We shal not be liable in any way for not recognising such an interest or claim except as and when required by the law.

5. Interest
5.1 Interest would be calculated on daily basis and at fixed rate specified in the applicable Bond offering. Interest is earned at 1/365th of the annual rate for each day (or 1/366th for each day in a calendar leap year on the principal amount of your Bond).
5.2 Interest for your Account will be paid net of income tax on the prescribed rate

6. Closing a Bond
6.1 Prior to the Maturity Date, and only if we decide to make a new issue of Bonds, we will write to you to give you the opportunity to invest all or part of the maturing value of your current Bond into any new Bond that we may offer, but we will only do so on your written application following a new Bond offering by us.
6.2 If (i) you decide not to reinvest any part of your Bond at the maturity; (ii) we do not make a further Bond offering at such time; and / or (iii) you do not give us clear instructions as to whom the proceeds of the Bond should be paid, then on the Maturity Date, we shall place the maturing Bond funds into a "Bond Maturity Account" at the rate published on our website, in your name pending your further instructions. We will not issue a cheque to any third party.

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