Bueller.....
- Wade
"Premium bonds are bonds that are purchased in excess of par value. In the case of a premium bond, because the worst-case yield is always reported on the trade confirmation, the yield-to-call value is printed. Yield-to-call, remember, is the percentage payout (paid semiannually) of the bond at the date the issuer could recall the bond."
Oh hell, I thought to myself, as I scribbled down mostly nonsensical notes. Why did I get myself into this again? The last time I had note-taking cramp was 1997, senior year at college. I graduated in 1998, but secured my first job in December of '97. Needless to say, I didn't do a whole lot of note-taking second semester that year.
"Discount bonds, conversely, are purchased below par value. The worst-case scenario yield on a discount bond is always yield-to-maturity, so that is what is printed on the trade confirmation."
Welcome to Series Seven class, night number one of nine. Assuming I pass the test in March, I will licensed to sell securites to anyone in Minnesota. Don't expect any calls, though. I'm just doing this to be more useful in my current job, which often tests my currently finite knowledge of the financial industry. Oh, and having your Series Seven license is nice resume candy, too.
Nine classes in nine weeks, four hours per week, plus about 10 hours of homework a week. That's no small amount of time, but it's winter. Not like there's a whole lot else to do, besides watch reruns of Celebrity Poker on Bravo. Taking this test has become a personal challenge for me... I haven't really done anything like this since Olaf, and I want to prove to myself that I can still do it.
A painful trip? Yeah. I always considered myself a good test-taker, but I don't think I can rely on that anymore. The Series Seven test is a six-hour, 250-question test. They're all multiple choice, which is good-- but most questions feature those enjoyable "both b and c" options, which I hate. As the teacher said last night, I've got the right to be crabby for the next couple of months. It's fine so far, but this week was the "easy week."
"When the yield curves for government bonds and AAA corporate bonds begin to widen, that means that consumers are fleeing the more risky corporate bonds for safter (although lower-yielding) government bonds-- this indicates an oncoming recession. Conversely, when investors anticipate expansion, they will sell government bonds and buy corporate bonds, narrowing the yield spread."
Oh hell.
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