In the midst of World War II, the U.S. government began issuing defense bonds, later calling them war bonds once the country entered the war. Although the citizens who purchased the bonds could have received a better return on their investments elsewhere, they took comfort in knowing that their investment would help with their country’s war efforts and there would be a guaranteed return. Even through the deadliest and most costly war in history, people felt assured in the security that was provided through the purchase of bonds. Even today, investors and organizations can rely on the same security that bonds provide. Organizations may also consider the option of issuing bonds in order to raise money for projects and operations. Therefore, it is important for financial managers to understand aspects of bonds, such as how sensitive they are to interest rates and how some features benefit issuers, while others benefit investors.
For this Assignment, you will answer a series of questions related to bonds.