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Ask your broker to send you an old copy of the Standard
and Poors Bond Guide. They are published once a month
and contain the answer to most of your questions.
Non-callable bonds are marked NC, other bonds may be callable at different dates (they are listed) at different prices. As they get near the maturity date
they will be callable at 100% (ie. PAR). When the bond
is called you will be paid the call price+ any interest
due and the bond is then cancelled. Yield to maturity
is a calculation based on bond yield AND bond price.
You will find it in the last column in the S&P bond
guide. If the bond is selling at a 100 (ie. par) the
yield and YTM will be the same. If the bond is selling
at a discount, (ie.below par) the the YTM will show a greater return and the difference will create a capital gain on sale of the bond. If the bond is selling at a premium, the YTD will be < than the original interest rate on the bond. Thus, if you buy a bond at a premium
and hold to maturity, you will only get 100 (ie. par) for the bond. It really does not make sense to buy low
interest bonds into to retirement accounts. I have
held carefully chosen discounted, high yield industrial
bonds in my IRA's for many years but this is considered risky for investors who do not thoroughly research and
and track the bonds. Good Luck! - - Matthew
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