Don't get hurt by high-income bonds

Article Abstract:

Investors in guaranteed-income bonds in 1990 have protected their capital and seen high income levels, but investors in high-income bonds have seen their capital eroded. Guaranteed income bonds (Gibs) guarantee both income and capital, while high-income bonds do not guarantee capital. Interest rates look set to rise in 1996 which is thus not a good time to buy Gibs. Guaranteed equity bonds (Gebs) guarantee a specific return for a set periodand returns are aggregated so this type of product does not provide a regular income.

Capital market, Capital markets, Study and teaching, Bonds, Bonds (Securities)

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On the trail of traditional options

Article Abstract:

Traditional options are not as well known as traded options, and are traded on the Traditional Options Market in London, England, rather than the London International Financial Futures and Options Exchange (Liffe). Liffe options offer more flexibility in terms of when they can be exercised. Holders of traded options do not receive dividends, but holders of traditional options do receive payments in cash equivalent to net dividends. Not all brokers will accept private clients due to risks involved.

Financial Transactions Processing, Reserve, and Clearinghouse Activities, Security & commodity services, not elsewhere classified, Options Clearing, Options (Finance), Derivatives (Financial instruments), Options clearinghouses

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