Types of Bonds
(1) Divided by Issuing Body
By issuing body, bonds can be divided into government bonds, financial bonds, and corporate (enterprise) bonds 1. Government Bonds Government bonds are bonds issued by the government to raise funds. It mainly includes national bonds, local government bonds, etc., of which the most important are national bonds. National bonds are also known as "gilt-edged bonds" because of their good reputation, favorable interest rates and low risk. In addition to the bonds issued directly by government departments, some countries also categorize government-guaranteed bonds as government bonds, called government-guaranteed bonds. This kind of bond is issued by some companies or financial institutions which have direct relationship with the government, and guaranteed by the government. 2. Financial bonds Financial bonds are issued by banks and non-bank financial institutions. At present, financial bonds are mainly issued by policy banks such as China Development Bank and Export-Import Bank. Financial institutions generally have strong financial strength and high creditworthiness, so financial bonds often have a good reputation. 3. Corporate (enterprise) bonds Corporate (enterprise) bonds are bonds issued by enterprises in accordance with legal procedures and agreed to repay the principal and interest within a certain period of time.
Corporate bonds are issued by the main body of the stock company. The main body of the issuance of corporate bonds is a joint-stock company, but can also be a non-joint-stock company issued by the enterprise bonds, so the general categorization, corporate bonds and bonds issued by the enterprise together, can directly become a company (enterprise) bonds. (ii) Divided according to whether there is a property guarantee According to whether there is a property guarantee, bonds can be divided into mortgage bonds and credit bonds. (1) Mortgage bonds are bonds secured by corporate property, which can be further divided into general mortgage bonds, real estate mortgage bonds, movable property mortgage bonds and securities trust mortgage bonds according to the different collateral. Real estate such as houses as collateral, known as real estate mortgage bonds; movable property such as marketable goods as collateral, known as movable mortgage bonds; securities such as stocks and other bonds as collateral, known as securities trust bonds. Once the bond issuer defaults, the trustee can sell and dispose of the collateral to ensure the creditor's priority claim. (2) Credit bonds are bonds issued solely on the basis of credit without any corporate property as collateral. Government bonds belong to this category. This type of bond has a solid reliability due to the absolute creditworthiness of its issuer. In addition to this, some companies can also issue this type of bond, i.e., credit corporate bonds. The holders of credit bonds bear more risk than those of mortgage bonds and therefore tend to demand higher interest rates. In order to protect the interests of investors, the companies that issue these bonds are often restricted and only large, reputable companies are eligible to issue them. In addition to this in the bond contract should be added to the protective provisions, such as assets can not be mortgaged other creditors, can not merge with other enterprises, without the consent of the creditors can not sell assets, can not issue other long-term bonds and so on. (C) according to the bond form classification bonds according to its form can be divided into physical bonds, certificated bonds, book-entry bonds (1) physical bonds (bearer bonds) physical bonds is a standard form of physical coupon bonds. It corresponds to no physical coupon, which simply means that the bond issued to you is paper rather than a number in a computer. In its coupon, generally printed on the face of the bond denomination, bond interest rate, bond term, bond issuance bond
The full name of the issuer, the repayment method of interest and so on a variety of bond coupon elements. Its bearer, not lost, can be listed for circulation. Bonds in kind are bonds in the general sense, and the format of bonds in kind is clearly defined by law or regulation in many countries. Physical bonds will be gradually canceled due to their high issuance costs. (2) Voucher-type bonds Voucher-type treasury bonds refer to the treasury bonds issued by the state in the form of filling out "treasury receipt vouchers" without printing physical vouchers. China began issuing certificated treasury bonds in 1994. With characteristics similar to and superior to those of savings, certificated treasury bonds are often referred to as "savings treasury bonds," and are an ideal investment for individual investors who aim to save. They accrue interest from the date of purchase, can be registered and lost, but cannot be listed for circulation. They are similar to savings, but the interest rate is higher than that of savings. (3) Book-entry bonds Book-entry bonds refer to coupons without physical form, which record claims by computerized bookkeeping and are issued and traded through the trading system of the stock exchange. In recent years, China has issued and traded book-entry treasury bonds through the trading systems of Shanghai and Shenzhen stock exchanges, which are examples in this regard. If investors buy and sell book-entry bonds, they must set up an account with the stock exchange. Therefore, book-entry treasury bonds are also known as paperless treasury bonds. Book-entry type treasury bonds can be transferred at any time after purchase in the securities market, liquidity is strong, just like the sale and purchase of stocks, of course, the transfer of the middle of the day in addition to the interest due (market pricing has been taken into account), but also to obtain a certain spread of income (does not rule out the possibility of loss), this kind of treasury bonds with interest-paying bonds and 0-coupon bonds of two kinds. Interest-paying bonds are issued at par and pay interest once or more times a year, while 0-coupon bonds are issued at a discount and paid at par at maturity. Interest is no longer accrued in the middle. As the book-entry type treasury bond issuance and transaction are paperless, so the transaction efficiency, low cost, is the trend of the future development of bonds. What is the difference between book-entry treasury bonds and certificated treasury bonds? (1) In the issuance method, book-entry treasury bonds are issued through computerized book-entry and paperless issuance, while certificate treasury bonds are issued through paper book-entry certificates; (2) In terms of circulation and transfer, book-entry treasury bonds can be bought and sold freely, and the circulation and transfer is also more convenient and faster. Certificated treasury bonds can only be redeemed in advance, can not be circulated and transferred, early redemption also have to pay a fee; (3) in the repayment of principal and interest, book-entry treasury bonds to pay interest annually, through the computer system on the same day automatically to the account, certificated treasury bonds are due to a one-time payment of interest, the customer needs to go to the bank for processing. (4) In terms of yield, book-entry treasury bonds are slightly better than certificated treasury bonds. Usually, the coupon rate of book-entry treasury bonds is slightly higher than that of certificated treasury bonds of the same maturity. (d) According to whether the bonds can be converted into company shares According to whether the bonds can be converted into company shares, the bonds can be divided into convertible bonds and non-convertible bonds
Convertible bonds. (1) Convertible bonds are bonds that can be converted into common stock at a fixed rate within a specific period of time, which has the dual attributes of debt and equity, belonging to a hybrid financing. Since convertible bonds give bondholders the right to become shareholders of the company in the future, their interest rates are usually lower than those of non-convertible bonds. If the conversion is successful in the future, the issuing company achieves the purpose of low-cost financing before the conversion and saves the issuance cost of shares after the conversion. According to the provisions of the Company Law, the issuance of convertible bonds shall be approved by the securities administration department of the State Council, and the issuing company shall have the conditions of issuing corporate bonds and issuing stocks at the same time. (2) Non-convertible bonds are bonds that cannot be converted into common stock, also known as ordinary bonds. Since they do not give the bondholders the right to become shareholders of the company in the future, their interest rates are generally higher than those of convertible bonds. (E) according to the way of interest payment (1) zero-coupon bonds Zero-coupon bonds, also known as discount bonds, refers to the bond coupon is not attached to the face of the bond, the coupon does not specify the interest rate, the issue of a specified discount rate, at a price lower than the face value of the bond issued at maturity according to the face value of the bond to pay the principal and interest. From the point of view of the interest payment method, the discount bond is issued at a price lower than the face value, which can be regarded as interest prepayment, and thus can be called interest prepayment bond, discount bond. Is a relatively short-term discount bonds. (2) Fixed-rate bonds Fixed-rate bonds are bonds in which the interest rate is printed on the coupon and interest is paid to the bondholders according to it. The interest rate is not adjusted with the changes in market interest rates, so fixed-rate bonds can better resist the risk of deflation. (3) Floating Rate Bonds The coupon rate of floating rate bonds is an interest rate that adjusts with changes in market interest rates. Because the interest rate of floating rate bonds is linked to the current market interest rate, and the current market interest rate takes into account the impact of inflation, so floating rate bonds can better resist the risk of inflation. Their interest rates are usually determined based on the market benchmark rate plus a certain spread. Floating rate bonds are often medium to long term bonds. (vi) Divided according to whether they can be repaid in advance According to whether they can be repaid in advance, bonds can be divided into callable bonds and non-callable bonds. (1) Redeemable bonds are bonds that can be recovered by the issuer at a pre-agreed redemption price before maturity. The main reason for the company to issue callable bonds is to increase the flexibility of the company's capital structure adjustment by taking into account the company's future investment opportunities and avoiding the interest rate risk and other issues. The most critical issue of issuing callable bonds is the formulation of redemption period and redemption price. (2) Non-callable bonds are bonds that cannot be recovered before maturity. (G) according to the different ways of repayment divided According to the different ways of repayment, the bond can be divided into a one-time maturity bonds and sub-bonds
term maturity bonds. (1) a maturity of the bond is the issuing company on the maturity date of the bond to repay all the principal of the bond; (2) installment maturity of the bond refers to the bond issued at the time of the bond with different maturity date of the bond, that is, the principal repayment of the bond in installments. Installment maturity bonds can reduce the financial burden of centralized repayment of principal by the issuing company. (viii) Classified according to the way of calculating interest (1) simple interest bond simple interest bond refers to the interest, regardless of the length of the period, only according to the principal of the interest, the interest will not be added to the principal to calculate the interest of the next period of the bond. (2) Compound interest bonds Compound interest bonds correspond to simple interest bonds, meaning that when calculating interest, the interest will be added to the principal and then calculated according to a certain period of time, rolling over the bond period by period. (3) Progressive Rate Bonds A progressive rate bond is a bond that bears interest at an annual rate that progresses from year to year. The interest rate of the progressive rate bond over time, the later interest rate is higher than the previous interest rate, is a progressive state.
Stock is a kind of securities, is a joint-stock company in the raising of capital, public or private issued to the contributors, used to prove the identity and rights of the contributors of the capital, and according to the number of shares held by the holder to enjoy the rights and obligations of the vouchers. Shares represent the ownership of their holders (shareholders) in the joint-stock company, and each share of the same type of stock represents equal ownership of the company, i.e., "equal shares, equal rights". Shares may or may not be publicly traded. On the stock market, shares are also the object of investment and speculation. Certain speculative behavior on stocks, such as short selling without stock, can cause financial market turbulence. Characteristics of the stock
(l) non-repayable Stocks are a kind of non-repayable period of securities, investors subscribe to the stock, can not ask for the return of shares, only to the secondary market to sell to a third party. The transfer of stock only means a change in the company's shareholders, and does not reduce the company's capital. In terms of duration, as long as the company exists, the stock it issues exists, and the duration of the stock is equal to the duration of the company's existence. (2) Participation Stockholders have the right to attend the shareholders' meeting, to elect the company's board of directors, and to participate in the company's major decisions. The stockholders' investment will and enjoyment of economic benefits are usually realized through the exercise of shareholders' participation rights. The size of the shareholders' right to participate in the company's decision-making depends on the number of shares they hold. In practice, as long as the number of shares held by shareholders reaches the actual majority required to influence the outcome of decision-making, they can grasp the decision-making control of the company. (3) Earnings Shareholders have the right to receive dividends or bonuses from the company on the basis of the shares they hold, thus earning a return on their investment. The size of the dividend or bonus depends mainly on the profit level of the company and the company's profit distribution policy. The profitability of stocks is also manifested in the fact that stock investors can obtain spread income or realize the preservation and appreciation of assets. By buying stocks at low prices and selling them at high prices, investors can earn spread profits. Take the stock of Coca-Cola Company in the United States as an example. If you invested $1,000 in the company's shares at the end of 1984, you could sell them at the market price of $11,654 in July 1994, earning a profit of more than 10 times. In times of inflation, the stock price rises as the replacement price of the company's original assets rises, thus avoiding a depreciation of the assets.
The stock ticker chart
. Stocks are often seen as a preferred investment during periods of high inflation. (4) Liquidity The liquidity of a stock refers to the tradability of the stock among different investors. Liquidity is usually measured by the number of shares outstanding, the volume of stock turnover, and the sensitivity of the stock price to trading volume. The greater the number of shares outstanding, the greater the volume, and the less sensitive the price is to volume (price does not change with volume), the better the liquidity of the stock, and vice versa. The liquidity of stocks allows investors to sell their holdings in the market and obtain cash. Through the circulation of stocks and the movement of stock prices, people's judgment on the development prospects and profit potential of the relevant industries and listed companies can be seen. Those industries and companies that attract a large number of investors in the circulation market and whose share prices keep rising can continue to absorb a large amount of capital into their production and operation activities through the issuance of additional shares, receiving the effect of optimizing the allocation of resources. (5) Price volatility and risk Stocks in the trading market as a trading object, like commodities, have their own market conditions and market prices. Because the stock price is subject to such factors as the company's operating conditions, supply and demand, bank interest rates, public psychology and other factors, its fluctuations have a great deal of uncertainty. It is this uncertainty that may cause stock investors to suffer losses. The greater the uncertainty of price fluctuations, the greater the investment risk. Therefore, stocks are a high-risk financial product. For example, dominant in the world's computer industry, the International Business Machines Corporation (ibm), when its performance is extraordinary, the price per share had been as high as 170 U.S. dollars, but in its position to be challenged, the emergence of business blunders and incurred losses, the share price fell to 40 U.S. dollars. An ill-timed purchase of the stock at a high price could lead to serious losses.
Funds (Fund) have a broad and a narrow meaning, in the broad sense, a fund is a certain amount of money set up for a certain purpose. For example, trust investment funds, unit trusts, provident funds, insurance funds, retirement funds, funds of various foundations. Funds in the existing securities market, including closed-end funds and open-end funds, are characterized by an income function and value-added potential. Analyzed from an accounting perspective, fund is a narrow concept meaning money with a specific purpose and use. Because the government and institutions of the contributors do not require investment returns and investment recovery, but require the funds in accordance with the provisions of the law or the wishes of the contributors in the designated purposes, and the formation of the fund
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