wHAT ARE BONDS
...o invest in their company. In other words as firm would do this so more investors will invest on them. Another reason is that in some cases don’t pay investors until they mature and if the company starts to pay dividends the equity note holders would benefit because they don’t actually own the stock. And if the company issued stock it does have to pay so that will be a bigger expense same thing with the bonds. 3. Go to www.amex.com find the structure products tab summarize the various types of structures that are listed When I went into the website I found Index Linked Notes is a generic term used to describe a structured product linked to an underlying index. At maturity, issuer usually pays principal plus a redemption amount linked to the performance of the underlying index. Index Linked Notes structures will vary from issuer to issuer Equity Linked Term Notes is a generic term used to describe structured products linked to an underlying stock, a basket of stocks, or an index representing a group of stocks. At maturity, holders will receive cash or shares of the underlying stock. Structures vary from issuer to issuer. Convertible Notes is a generic term used by multiple issuers. Convertible notes are generally linked to an underlying security and may be callable by the issuer and exchangeable by the investor. At maturity, these notes are paid either in cash or in shares of the underlying security. The structure of Convertible Notes will vary from issuer to issuer, but their par value is generally $1,000 and they trade as bonds. Index Linked Term Notes is a generic term used to describe a structured product linked to an underlying index. At maturity, issuer usually pays principal plus a redemption amount linked to the performance of the underlying index. Index Linked Notes structures will vary from issuer to issuer 4. The structure of this security is SPARQS. It will pay 8% interest per year but does not guarantee any return of principal at maturity. Instead, the SPARQS will pay at maturity a number of shares of Yahoo! common stock, subject to our right to call the SPARQS for cash at any time beginning December 30, 2004. The principal amount and issue price of each SPARQS is $16.955, which is equal to one-half of the NASDAQ official closing price of Yahoo! common stock on June 23, 2004, the day we priced this offer of SPARQS for initial sale to the public. It will pay 8% interest (equivalent to $1.3564 per year) on the $16.955 principal amount of each SPARQS. Interest will be paid quarterly, beginning October 15, 2004.At maturity, unless we have called the SPARQS for the cash call price, you will receive one-half of one share of Yahoo! common stock in exchange for each SPARQS, subject to adjustment for certain corporate events relating to Yahoo!. The maturity of the SPARQS may be accelerated under limited circumstances, including in the event of a substantial decline in the price of Yahoo! common stock. Article 2 1. Define the following terms “duration” “negative Carry” ”short sale” inverse bond fund” “yield curve” Duration = the change in the value of a fixed income security that will result from a 1% change in interest rates. Duration is stated in years. Negative Carry= Condition in which the cost of borrowing money exceeds the return...