The features of a bond are
determined by characteristics such as duration,
repayment, interest rate,
currency and issue price.
Fixed-rate bonds, floating-rate bonds and zero bonds usually have to be repaid at the end of the agreed duration. Common durations on the
SIX Swiss Exchange are as follows:
-
Short term (up to four years)
-
Medium term (four to eight years)
-
Long term (more than eight years)
Interest rates are normally higher for longer durations as the capital provided has to be
"spared" for longer. If a fixed duration was agreed for a bond, the investor is usually
repaid the
nominal value. In addition, the
terms and conditions of the bond issue may provide for premature repayment of the capital.
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