Fairway Bond
The goal of any good tee shot is to keep it on the fairway; we want to keep it between the rough sections, and on course toward its goal.
Fairway bonds kind of operate on the same premise. A fairway bond is a special little bond that is attached to a floating interest rate. What this means is that people who own them can make extra coin on them as long as that interest rate stays within a certain range between the date that they buy it and the date that the bond matures.
These bonds are a pretty good deal for the more conservative investing crowd out there. Worst case scenario, the interest rate doesn’t stay in its specified range (i.e., on the fairway), and when the bond matures, all you get is your money back. Boo. Best case scenario, if you buy one of these puppies because you think the interest rate is going to rise into your specified range, and then it does, you can make a pretty penny on your investment and get the value of the bond itself back when it matures. And then you don't have to throw your club into a tree.
Related or Semi-related Video
Finance: What is a Surety Bond?0 Views
Finance allah shmoop What is a surety bond Think sure
It t like certainty Remember when you were a kid
at summer camp and had to pony up a buck
to prove your heavy roller status at friday night's poker
game And then there was a buddy who promised to
pay more than that if you lost more than your
buck Well surety bonds air kind of like that We
repeat kind of a surety bond is an agreement between
three parties One party guarantees that a second party will
fulfil a promise to the third party For example one
signer might guarantee that a small business will honor a
government contract That is that small business will have to
go borrow a whole bunch of money to go build
a bunch of fence wire stuff for the government that
they would need somewhere in the south And then some
bigger contractor would guarantee that that small business will in
fact perform on the contract If the small business doesn't
perform the contract like as guaranteed building whatever fencing materials
and the government wanted to build will the person who
signed on their behalf would likely have to either pay
up or build the fence themselves The big guy i
either guarantor gives the little guy the principal surety in
delivering the contract to whoever wants it toe happen A
k a The oblige g remember that song about the
government there yet oblige E ope elijah Life goes on
Sorry we're done anyway all the parties involved bond with
certainty the delivery of whatever product or service that surety
bond is standing behind So yeah that's what it is 00:01:36.669 --> [endTime] And don't call us surety
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