Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Role of Fixed Income Analysis Benefitting Your Investment

An overview of fixed income analysis helping you to make effective decisions

icon 1023603 Orders Delivered
icon 4.9/5 5 Star Rating
5030 PhD Experts

Guaranteed Higher Grade Or Get Your Money Back!

Get Help Instantly

750 Words

Our Top Experts

Michael Johnson

Masters of MSc in Economics

2594 - Completed Orders

hire me
Gemmie Chen

MSc in Nursing

1309 - Completed Orders

hire me
Harold Alderete

PhD in Economics

154 - Completed Orders

hire me
Emma Zhong

Ph.D in Project Management with Specialization in Project Communications Management

2109 - Completed Orders

hire me

Great Academic Solution

icon 1023603 Orders Delivered
icon 4.9/5 5 Star Rating
5030 PhD Experts

AMAZING FEATURES

icon Plagiarism Free
icon Best Price
icon 100% Money Back
icon Top Quality
On Time Delivery
24 x 7 Support

Live Review

Our Mission Client Satisfaction
Australia-flag
     #293142 from Australia
27 Jun 2019

The way they put the assisgnemnet together was unbelievable. I always said this but this time I can't believe it in such..

Australia-flag
     #210566 from Australia
27 Jun 2019

Thank you so much for your hard work and awesome team of expert. I am very happy with the work and data of research. And..

Australia-flag
     #282741 from Australia
27 Jun 2019

It was a good assignment. When i checked for plagiarism it comes out low plagiarism.

Australia-flag
     #255379 from Australia
27 Jun 2019

Great work! This is my fourth paper and I will continue to use My assignment Help for all my essay.

Australia-flag
     #290133 from Australia
26 Jun 2019

A very good task and a right choice, they are professional and talented with having an endeavor in helping others on a timely manner without hesitation.

Fixed income analysis deals with the study of fixed income or liabilities involved in the operation of a business. This subject briefly analyzes factors like interest rate risk, credit risk, debt risk, etc. falling in different portfolios. It provides you with a wide variety of choices to buy, sell, hold or drop a particular liability. Thus, this subject holds a great significance in the analysis of an overall income of a business evaluating its potential. Here you will understand the analysis of fixed income along with its benefits and value of money.

What is a Fixed Income Analysis?

A fixed income analysis is an income-oriented method used to analyze various sources of income in a business. It evaluates every aspect of these sources very carefully to help marketers estimate the real value of the business. Some of the crucial factors playing their part in the evaluation are rate or credit risk, and factors like price variation. Thus, this analysis allows you to get acquainted with real-world events with a clear objective to learn advanced concepts.

In simple words, fixed income analysis elucidates you regarding the benefits of collateral enjoyed by the investors until its maturity. After completing its maturity period, investors receive the principal amount that they had invested initially. Among various types of fixed income prevailing in an economy, bonds issued by the government are most popular. Also, this analysis concludes the possibilities to buy, sell, hold or leave the possession of an asset. Thus, this analysis allows bondholders to enjoy the benefits of their investment after its maturity.

What Do You Understand by Time Value of Money?

Time value of money is a concept evaluating the value of money at present compared to its future value. It concludes the value of present money more than its future value due to its potential earning capacity. According to this principle, the net worth of an amount is more today as compared to its value tomorrow. This concept dramatically emphasizes the importance of time associated with determining the worth of money. The primary reasons for this variation in the value of money are inflation and possible earning capacity. Thus, in finance, an amount in the hands today can generate interest contributing to its higher present value more than the future. For example, the value of a dollar yesterday was more as compared to today; and the value of a dollar today is more than its value tomorrow.

What is Considered a Fixed Income?

Fixed income is a term of finance referring to an investment that pays back the investors regularly until its maturity. It compels the borrower or issuer to make fixed payments in regular periods to help the investor earn profits. Once reaching the maturity of an investment, investors receive the principal amount they had invested initially. Fixed income has an extensive variety of products categorized under it including some common factors like bonds, pensions, and loans. Other products like deposit certificates, savings account, market funds, and annuities are also categorized under the fixed income. If you are willing to step in the market and invest capital, you can do so in mutual funds or trade funds.

What are Examples of Fixed Income Investments?

To achieve a better understanding of fixed income investments and learn how to invest wisely, you need to consider the following example.

Suppose there is a firm that has issued a bond in the market with a face value of $10,000. The maturity period for this bond is fixed for five years with an interest rate of 5% per annum. Now, the investor will not receive back the principal amount before the bond's maturity, i.e., not before five years. For this period of five years, an interest payment called coupon payments is paid by the company in favor of investors. According to the terms and conditions of the market, investors receive a sum of $500 annually at the given rate of interest. After receiving $500 for five years, the investor becomes eligible to receive the principal amount invested initially. Thus, the time after five years is known as the bond's maturity period; and it is the time when the principal amount is paid back to the investor.

Why Is Fixed Income Important?

5 Key Significance of Fixed Income

  • Fixed income benefits the investors with a fixed sum of money for a fixed period until the maturity of the bond.
  • The payments received from fixed income also helps the investors to maintain their investment portfolio adequately.
  • An investor can earn huge profits if the prices of stock fluctuate periodically resulting in an increased value of that stock.
  • Fixed income investments guarantee substantial gains as the government of an economy strongly backs it.
  • Investors enjoy the benefits of high returns in a case where any claim is made in the event of liquidation of assets.

How to Calculate Fixed Income?

To calculate the fixed income, you need to evaluate the bond value at its maturity including the compound interest. Also, you need to evaluate the coupon payments to estimate the value of the bond at its maturity. It is imperative for you to calculate the total return to evaluate the fixed income return. Thus, the formula to calculate the total return can be given as follows:

Total Return: {[End value of principal + Coupon interest + Compound interest] - (Taxes + Commission) - [Begining value of principal] / Begining value of principal} * 100

Valuation of Fixed Income

Fixed income has been known as the source to earn more profits for an investor in the form of regular payments. Thus, fixed incomes in the form of bonds are more popular than equities due to is a higher rate of interest. In the technique of fixed income valuation, you can get a theoretical value of fixed incomes like a bond or equity. The valuation of fixed income includes determining the present value of an investment's interest payments in its future. This value of the investment is also known as the cash flow of a business. Apart from this, the value of an investment at its maturity is also known as its face value or par value. Therefore, the technique of valuation is used by an investor to determine the rate of return for a fixed income.

Can Fixed Income Funds Lose Money?

There is a widespread misconception among investors that fixed incomes lose or gain money. But in core financial terms, fixed income only depreciate or appreciate in the market depending on their Net Asset Value (NAV). Among various factors, the most crucial one you need to understand is that mutual funds are not safe players. Being an investor, you need to understand the difference between fixed income and bonds with a regular price. In a fixed income, it is widely observed that the value of bonds depreciates with time.

Exceptional Services of Myassignmenthelp.com Benefitting Students

Are you facing trouble while writing an unmatched assignment for your college/university? And that too under the immense pressure of tight deadlines. Well, it is most prevailing among the students studying in higher grades. The primary source of this pressure in your life is the vast academic syllabus. Thus, a subject like fixed income analysis can haunt you to the extent of your nightmares cornering you into the darkness. Have you ever thought of doing good in your college assignments and enjoying your time with your family simultaneously? Seems pretty impossible, right? Well, with the developing age, everything is possible now.

Myassignmenthelp.com is the support you need to maintain a healthy balance between your academic and social life. Knockdown all your adversities and achieve the desired results. Our exceptional services promise you a sharp rise in your grades helping you to conquer the cliff of success. Also, we have a team of expert’s working day and night to provide you with a top-notch assignment. We have a history of successfully catering to thousands of students worldwide from the past decade with maximum customer satisfaction. The quality of knowledge our experts possess play a significant role in helping you to score maximum grades. Myassignmenthelp.com can successfully deliver you with an unmatched assignment contributing significantly to your higher grades.

So, if you have the cravings to secure maximum grades and live a better future, Myassignmenthelp.com is the help you need. Our experts work at their maximum capacity ensuring you the first assignment. Apart from this, we have a team of customer support service available 24*7 working dedicated to assisting you most effectively. Furthermore, myassignmenthelp.com benefits you with an extensive variety of free services. Some of these free services include free plagiarism check, free changes in your assignment, free unlimited revisions, etc. Get in touch with our customer support team and experience the joy of learning and success in a fantastic way.

Free plagiarismFree plagiarism check online on mobile
Have any Query?