More features of bonds to consider

Other features of a bond that a purchaser should be aware of are the following:

The holder of the bond. This means that it may be possible sometimes to remove the coupon and the bond apart - this means that two different parties can benefit, with one receiving the proceeds at the time of redemption whilst the coupons are given to another separate party.

Redeemed at maturity. There are some that are issued which are not redeemed at maturity, but the majority will be. Some even allow the bond to be sold back to the issuer at a premium at the end of the bonds life.

Once the principal sum is repaid, some can actually be redeemed at a premium to their face value as above which is an interesting feature.

So these are the seven key elements of financial bonds outlined in this and the previous article, and it is worth having a good read through them to ensure that they are all understood to get a thorough knowledge of this product.

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