1. 9.02 Investing in bonds. T009-02.01 H17

2. Investing in Bonds Bonds –Promise to pay a definite amount of money at a stated interest rate on a specified maturity date. Bondholder –Individual who lends money to a corporation. T009-02.02 H18

3. Bond Terms Face Value –Amount being borrowed by the seller of the bond. Coupon Rate –Rate of interest on the bond. T009-02.03 H19

4. Types of Bonds Corporate Bonds –Issued by corporations –Used to finance buildings and equipment. Municipal Bonds –Issued by local and state governments. –Used to finance schools, roads, airports, etc. H20 T009-02.04

5. Types of Bonds Treasury Bonds –Issued by federal government. –Known as Savings or Federal Bonds –Types: Series EE Bonds –Cost half the face value. –After a specified number of years the bond becomes worth the face value. Treasury Bills –Issued for three months to one year. Treasury Notes –Issued for two to ten years. Treasury Bonds –Issued for ten or more years. T009-02.05 H21