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If you?re more accustomed to reading stock
exchange listings, the bond price tables in the newspapers look somewhat
different and, initially, hard to understand. But once you become familiar
with a few terms, the tables are understandable and provide information you
need to make informed investment decisions.
In the stock tables, you can look up a specific company and see its high and
low prices for the day before. That?s because there are far fewer stocks
listed on the three major exchanges, approximately 9,000, than the number of
bond issues outstanding at any given time. In addition, the stocks of most
firms tend to trade frequently, making it relatively easy to determine what
a given stock?s recent market price is.
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Column 1: Issuer - This is the company,
state (or province) or country that is issuing the bond.
Column 2: Coupon - The coupon refers to the fixed interest rate that
the issuer pays to the lender.
Column 3: Maturity Date - This is the date on which the borrower will
repay the investors their principal. Typically, only the last two digits of
the year are quoted: 25 means 2025, 04 is 2004, etc.
Column 4: Bid Price - This is the price someone is willing to pay for
the bond. It is quoted in relation to 100, no matter what the par value is.
Think of the bid price as a percentage: a bond with a bid of 93 is trading
at 93% of its par value.
Column 5: Yield - The yield indicates annual return until the bond
matures. Usually, this is the yield to maturity, not current yield. If the
bond is callable it will have a "c--" where the "--" is the year the bond
can be called. For example, c10 means the bond can be called as early as
2010.
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