showing the amount of interest, when due, and where payable. There is one coupon for each interest payment, to be detached and negotiated like any other commercial paper.

330. A registered bond is a bond payable to the owner whose name is registered in the books of the issuing company. A registered bond can be transferred only by assignment.

331. The value of a bond depends on the security back of it, on the rate of interest it pays, and on the time it has to run. Values are affected by current money rates just as any other values are affected by them.

20 YEARS-Interest Payable Semi-annually.

Met per BONDS BEARING INTEREST AT THE RATE OF num.7% 6% 5% 4% 4% 3% 3%

5

AR

4 141.03 127.36 113.68 106.84 100.00 93.16 86.32 4.10 139.32 125.76 112.20 105.42 98.64 91.86 85.09 4% 138.90 125.87 111.84 105.07 98.31 91.54 84.78 4.20 137.63 124.19 110.75 104.03 97.31 90.59 83.87 44 136.80 123.42 110.04 103.35 96.65 89.96 83.27 4.30 135.98 122.65 109.33 102.66 96.00 89.34 82.68 43% 134.75 121.51 108.27 101.65 95.04 88.42 81.80 4.40 134.35 121.14 107.93 101.32 94.72 88.11 81.51 4% 132.74 119.65 106.55 100.00 93.45 86.90 80.35 4.60 131.16 118.18 105.19 98.70 92.21 85.72 79.22 4% 180.77 117.82 104.86 98.38 91.90 85.42 78.94 4.70 129.61 116.74 103.86 97.43 90.99 84.55 78.11 434 128.84 116.02 103.20 96.80 90.39 83.98 77.57 4.80 128.08 115.32 102.55 96.17 89.79 83.40 77.02 4% 126.95 114.27 101.59 95.24 88.90 82.56 76.22 4 90 126.58 113.92 101.27 94.94 88.61 82.28 75.95 125.10 112.55 100.00 93.72 87.45 81.17 74.90 5.10 123.65 111.20 98.76 92.53 86.31 80.09 73.86 5% 123.29 110.87 98.45 92.24 86.03 79:82 73.61 5.20 122.22 109.87 97.53 91.36 85.19 79.02 72.85 54121.51 109.22 96.93 90.78 84.64 78.49 72.34 5.30 120.81 108.57 96.33 90.21 84.09 77.97 71.85 53% 119.77 107.60 95.44 89.36 83.27 77.19 71.11 5.40 119.42 107.28 95.14 89.07 83.01 76.94 70.87 51⁄2 118.06 106.02 93.98 87.96 81.94 75.92 69.90 5% 116.38 104.47 92.55 86.59 80.64 74.68 68.72 534 114.74 102.95 91.15 85.26 79.36 73.46 67.57 5% 113.13 101.46 89.78 83.95 78.11 72.27 66.43 111.56 100.00 88.44 82.66 76.89 71.11 65.33 64 108.50 97.17 85.84 80.18 74.51 68.85 63.19 6% 105.55 94.45 83.34 77.79 72.24 66.69 61.14 634 102.72 91.83 80.95 75.50 70.06 64.62 59.17 100.00 89.32 78.64 73.31 67.97 62.63 57.29

6

7

The usual par value, called denomination, of a bond is $1000. No fractional part of a bond can be purchased.

The following table, called a bond table, is used

in determining the value of a bond, which has 20

yr. to run.

The left-hand column gives the rate of income; the top row gives the rate paid on the bond; the figures in the body of the table show what can be paid for any given bond to net a certain per cent on the investment. Thus, a 5% bond, if bought for $113 68, will net 4%; if bought at $110.04, will net 44%, etc. Likewise, a 3% bond, bought at $84.78 will net 41%.

Also, a man wishing to make an investment on a 51% basis might buy a 41% bond at $87.96.

EXERCISES

Allow for no brokerage in the first seven problems.

1. Using the table, find the price at which 20-yr. bonds can be bought to yield as follows:

5% bond to yield 4%.

6% bond to yield 5.4%.

41% bond to yield 5.3%.

2. Find the rate of income on 20-yr. bonds bought as follows:

6% bonds bought at 114.27.
31% bonds bought at par.

5% bonds bought at 80.95.

3. A man invested in first-mortgage industrial bonds bearing 5% at a price which yielded him 4.80%. What was the quoted price?

(In this problem, and in those to follow, consider all bonds as maturing in 20 yr.; interest coupons as due Jan. 1 and July 1.)

4. An issue of $15000 of 5% bonds is sold for $14,449.50. What rate do they pay the purchaser ?

5. On June 12, I purchased five $1000 31% bonds quoted at 82 and interest. How much do I pay for them?

SUGGESTION. Compute the accrued interest from the time of the last payment, and add to the quoted price.

6. If I buy a $1000 7% bond at 102.8 + $27.50 accrued interest, what is the rate of income on my investment?

7. A Paris, France, municipal loan of $41,000,000 3% bonds was oversubscribed 70 times, that is, the subscription amounted to $2,870,000,000. If the bonds were allotted pro rata according to subscriptions, what amount was awarded to the man who subscribed for $130,000 worth?

8. A man having $7000 to invest wishes to secure an income of 45% on a 41% bond. How many $1000 bonds can he buy, and how much will he have left of his $7000?

NOTE. The broker's charge for the purchase or sale of a bond is the same as for stocks; viz., of 1%, or $1.25 for each $1000 bond.

Fill in the blank spaces in the following. Notice that under "quantity" the par value of the purchase is given instead of the number of bonds.

14. A man deposits $25000 with his broker for the purchase of Northern Pacific 4's at 981, brokerage %. How many bonds will be purchased for him, and what cash balance will he have left with the broker?

15. Cole & Co., brokers, sent this statement to R. T. Allen: "We have this day bought for your account and risk as per instructions and in accordance with the rules and customs of the New York Stock Exchange, through Wilson & Co.:

What is the amount of R. T. Allen's investment? What commissions do Cole & Co. get? What is the rate of income on the entire investment?

NOTE. The tax, called a transfer on all stock sales. This charge is 2 tax on shares of $25 par value would be 50 per 100 shares.

tax, is a charge, paid by the seller, per share of $100 par value; the

EXCHANGE

332. Exchange is the term applied to the transfer of money from one place to another otherwise than by actually sending the money itself.

333. Exchange is domestic, if between two places in one country; foreign, if between two places in different countries.

334. There are three important factors in exchange :

1. The amount to be transferred.

2. The charge for such transfer.

3. The value of ready money in one place as compared with that in another.

335. It is not surprising that money may have different values in different places. This value depends on the rate at which it can be borrowed from the banks. If the banks in one community have plenty of money on hand, and there is no great demand for it, money will be "cheap"; i.e., the rate of interest on loans will be low. But if there is no great surplus of cash on hand, and much money is needed for carrying on business, money will be "dear" or "tight"; i.e., the rate will be higher.

336. The value of money in one place as compared with its value in another is called the rate of exchange between these two places.

337. Rates of exchange fluctuate, being governed by trade, or business conditions. Published rates of exchange usually include the cost of the transfer.