Forex trading – The corporation, in this security, promises to repay the borrowed funds at some remote future date”10, 15, or 50 years away”and for the protection of investors pledges its property under a first mortgage or lien.

Northern Pacific Prior Lien 4’s, and West Shore Railroad 1st Mortgage 4’s are good examples. If, later on, a company fails to pay interest on its mortgage bonds, the bondholders have the legal right to foreclose, i.e., take over the mortgaged property, and either sell it or operate it to satisfy their claims against the borrower. There are some other types of bonds you should know about. There’s the collateral trust bond wherein specific assets, usually securities (either bonds or stocks), may be pledged to assure payment of principal and interest.

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[tags]Day Stock Trading[/tags]