ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The three basic components of a bond are its maturity, its face value, and its coupon yield. Bond prices fluctuate inversely to interest rates. A bond’s current price is determined by its yield relative to other bonds along the yield curve, its rating (as set by ratings agencies), and whether the bond is callable.

Detailed explanation-2: -Bonds pay a fixed rate of interest every six months until they mature. You can hold a bond until it matures or sell it before it matures. EE Bonds, I Bonds, and HH Bonds are U.S. savings bonds. For information, see U.S. Savings Bonds.

Detailed explanation-3: -Some of the characteristics of bonds include their maturity, their coupon (interest) rate, their tax status, and their callability.

Detailed explanation-4: -Classification by Creditworthiness of Issuer Ratings below these are non-investment grade, high-yield, speculative, or “junk” bonds. Investment-grade bonds are generally more liquid than high-yield bonds.