remember that the interest is paid on the face value of the bond, so if you can buy a 5 per cent bond at just 10 per cent of its face value you can earn a handsome yield of 50 per cent. In essence, you expect a return proportional to the risk you are prepared to take.
Niall Ferguson's "The Ascent of Money" explores the intricacies of financial systems and investment strategies. A crucial point is that the interest earned on bonds is calculated based on their face value, which can lead to lucrative opportunities for investors who acquire bonds at a significant discount. For instance, purchasing a bond with a 5 percent interest rate at just 10 percent of its face value could yield an impressive 50...
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