Thanks to the magic of bond-premium amortization, that maneuver reduces your taxable interest income over the life of the bonds.
It often makes tax sense to sell a bond at a premium and pay capital gain taxes on it.
The reason is that someone buying a high-coupon bond at a premium is entitled to write off the premium over time as a deduction against the interest income.
Bonds, such as the U.K. premium bond, can give the child a chance to be exposed monthly to the world of finance at an age when they would not understand other aspects of it.
The emerging markets bond, with its risk premium, is up 3.39% and the US Treasury bond fund is up 0.54%.
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Another risk is if an investor buys a premium priced bond and the borrower prepays by refinancing or selling the home then the Note is paid back at par and the investor loses the premium.
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Gross bond sales are strong, and the premium over American Treasuries of J.
Treasury bond prices have been selling at a premium over the last several weeks as investors rotate out of equities and into fixed income.
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Soothing niceties from Cheshire-cat politicians no longer reassure bond markets Scotland would pay a premium for being part of a monetary union that could break.
An additional constraint is the make-whole premium, which is ultimately the highest price a bond can obtain.
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Bonds pay interest based on the expected inflation rate until maturity, plus a fair risk premium over inflation based on the riskiness of the bond.
With all of the conjecture about the true condition of state and local government finances and the likelihood of future municipal bond defaults, straight talk that you can trust comes at a premium.
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The holder of a bond rated single-B gets scarcely 3.5 percentage points of premium to compensate for what are sure to be nasty losses of principal whenever a recession hits.
If you look at the bond prices of some of these Asian names, they are trading at a premium.
And so corporate bond spreads are widening--meaning, corporate IOUs have to show more of a yield premium over Treasurys to attract buyers.
Bond yields are around 4% above the inflation rate, well above the 2.5% premium that has prevailed in recent decades.
However, the possibility of a reduction in the US Treasury credit rating would affect the bond markets, and corporate debt as well, which would be forced to pay a higher insurance premium for its debt going forward in the case of a US downgrade.
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