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• bond funds
  • multiple bonds in a fund
  • safety in numbers
• individual bonds
  • admin fee
  • minimum $ requirement

Bond Prices vs Interest Rates

Example

• Company A
  • $1000
  • 2 Year Maturity
  • yield - 10%/year
  • paid semi annually

So, say in 12 months, the interest rate goes up and now the bond pays 15%.

If you go to sell your bond before maturity, then you obviously can't sell it for the same value because the yield is now 15% not 10%.