Business and Personal Finance © 2007

Chapter 10: Bonds and Mutual Funds

Chapter Summaries

• Corporate bonds have the following characteristics: interest rates, maturity dates, and face values.
• Corporations sell bonds to raise funds for operations, expansions, or purchases.
• Investors buy bonds because they provide regular income, plus the principal must be repaid by maturity.
• Governments sell bonds for reasons similar to corporations: to fund regular activities and finance the national debt.
• Government bonds include Treasury bills, Treasury notes, and U.S. savings bonds (Series EE).
• Information on bonds is available in the financial press, corporate annual reports, bond rating reports, and online.
• Types of mutual funds include closed-end mutual funds, open-end mutual funds, load funds, and no-load funds.
• Mutual fund information is found in newspapers, annual reports, and financial publications, and through Web sites and advisors.
• Methods of buying and selling include regular account transactions, voluntary savings plans, payroll deduction plans, contractual savings plans, reinvestment plans, and withdrawal options.