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18 Cards in this Set
- Front
- Back
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What is a bond?
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A long-term debt security issued by a corporation or government entity promising to pay a stated amount of interest on the "face value" of the bond. The face value is normally re-paid at maturity.
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What is "face value?"
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The amount that is loaned to a company or government. This amount normally appears on the front, or face, of the certificate.
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Why do people buy bonds?
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People that want income from their investments.
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What is "paper?"
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Slang term for bonds.
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What is a tax free bond?
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It's a bond that pays interest that is free of federal and state income taxes.
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Who can issue tax free bonds?
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State and local governments as well as certain government projects such as highways, water and sewer systems.
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Why did the Federal Government pass laws allowing states to issue bonds free from taxes.
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Since governments and municipalities compete in the market for funds, if their interest rates are free of taxes, they can offer lower rates. This feature lets these government entities finance their operations at lower costs.
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If someone says they specialize in fixed income, what is the next question to ask?
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Do you focus on wealth individuals or institutions?
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What kind of prospect are fixed income specialists looking for?
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They are looking for people who already buy bonds.
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Which campaign should a fixed income specialist use?
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The municipal bond portion of the Elliott Campaign.
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What is a municipal bond inventory?
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It is a list of bonds the broker has for sale.
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What kind of people would respond to an offer to receive a municipal bond inventory?
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Bond buyers
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What are the two companies provide a rating for bonds?
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Moody's and Standard and Poor's.
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What is "Maturity" of a bond.
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It's how long before the issuing agency or company pays back the principal. You can have 1 year all the way up to 30-year maturities.
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What are the three criteria people use to buy bonds.
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Rating, maturity and interest rate.
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Have you read the Elliott Transactional Broker letter?
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Yes. (If not, go here: http://www.billgood.com/letters/letter_viewer.cfm?letter=1055)
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Have you read the Elliott Bond Inventory attachment?
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Yes. (If not, go here: http://www.billgood.com/letters/letter_viewer.cfm?letter=1299)
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If someone tells you they are a fixed income specialist and focus on institutions, what kind of client are they looking for?
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Banks, state governments, credit unions, insurance companies. These entities all invest heavily in bonds because they are relatively safer than stocks and the have to have some place to put their money.
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