For bond investors, it is usually less difficult to value a bond as opposed to a stock. Investors who seek bonds will have a lot of known factors to aid them, such as the coupon rate, maturity date, and credit rating. However, there are certain unknown factors when valuing bonds that can be difficult to predict, such as interest rates and inflation.
In this Discussion, you will select a bond and explain how a feature of that bond is used to determine its value.
By Day 3
Post a 150-word explanation of how your selected bond feature is used to determine the value of a bond. In your explanation, include the following:
- Describe the bond feature you selected in detail.
- Explain how the feature is used to determine bond value, including the importance of yield-to-maturity.
- To support your response, be sure to reference at least one properly cited scholarly source.