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A3. Basically, investors profit in two ways from putting their money into bonds: through the coupon...

A3. Basically, investors profit in two ways from putting their money into bonds: through the coupon rate, or interest rate, that is attached to each bond and provides a steady income, and through potential. …

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Capital Gains

capital gains represent the appreciation in the price of security or investment from the time that it was purchased. These gains can be either long or short term, depending upon whether the instrument sold was held for more than a year. Both equity and fixed-income securities can post gains (or losses). However, while fixed income securities can appreciate in price in the secondary market, they are designed primarily to pay current interest or dividends while stocks and real estate provide the bulk of their reward to investors in the form of capital gains.

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