Bond Pricing & Valuation

Krys Financials has been working in the Investment Banking and Securities Trading community since 1994. This experience has revealed unresolved challenges which concern the Pricing of investment Bonds and the agreed Yield of return.

  • These challenges are often the norm than the exception and have impacted the quality of business among Traders, Central Banks and Finance Ministries.
  • These challenges sometimes raise questions among Accountants and Auditors concerning the validity of gains/losses based on computed yields claimed by Traders.
  • These Bond Pricing challenges can possibly result in millions of dollars of trading errors, losses or gains between trading participants.
  • These challenges can also result in millions of dollars of accounting errors relating to accruals, amortization of premiums and accretion of discounts.

  • (Refer to BOND PRICING CHALLENGES - promoting a solution and BOND PRICING EXAMPLES and SOLUTIONS for more information.
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    Contrary to popular belief, savings bonds are not a simple investment. Each bond carries a unique set of information specific to that bond alone. This includes interest rates (two of them for most bonds), timing issues, maturity dates, values, and accrued interest. (Values alone are not enough!) Knowing the unique information that applies to each bond in a savings bond investment can make a significant difference in the return. Not knowing can mean forfeiting hundreds or, in some cases, thousands of dollars.

  • Bond owners seldom realize that they can forfeit up to six months of interest on most bonds.
  • Bond owners never receive a statement outlining their savings bond holdings.
  • Relying on verbal information is a mistake. Ask three people the same savings bond question and you are likely to get three different answers.
  • U.S. Savings Bonds may represent a significant portion of an individual's fixed investment portfolio and should be analyzed as any other investment. In order to maximize a person's total portfolio, the savings bond component must be taken into account.
  • A statement provides a way to compare savings bonds with other investment alternatives.
  • A statement will provide the data necessary for tax planning.
  • Over $5.3 billion of savings bonds held have stopped earning interest. A statement informs the bond owner of critical maturity and timing dates.