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Accurately explains the difference between the stock market and the bond market?
Equity is bought and sold in the stock market while debt is bought and sold in the bond market.
What best explains why the money supply is increased when the fed buys treasury bond?
When the Fed buys Treasury bonds, it increases the amount of deposits in people's bank accounts.The purchase of bonds increases the amount of deposits in people's bank accounts, which enables banks to loan more money
How can bonds issued by two companies paying same contractual interest rate be issued at different prices?
To calculate present value of the bond you also need to know market interest rate. If , for example these companies were issuing their bonds in the different time and market interest rate was different then bond could be sold at premium(the bond will cost more then its face value), par (same as face value), and discount (bond will cost less then face value.)
Foreign Currency Convertible Bond?
A type of convertible bond issued in a currency different than the issuer's domestic currency. In other words, the money being raised by the issuing company is in the form of a foreign currency. A convertible bond is a mix between a debt and equity instrument. It acts like a bond by making regular coupon and principal payments, but these bonds also give the bondholder the option to convert the bond into stock. These types of bonds are attractive to both investors and issuers. The investors receive the safety of guaranteed payments on the bond and are also able to take advantage of any large price appreciation in the company's stock. (Bondholders take advantage of this appreciation by means warrants attached to the bonds, which are activated when the price of the stock reaches a certain point.) Due to the equity side of the bond, which adds value, the coupon payments on the bond are lower for the company, thereby reducing its debt-financing costs.
How do governments borrow money?
Governments raise most their funds through taxes and other revenue, and occasionally tax revenue is not enough for pay for the government taxes so as a result the government must borrow money by issuing bonds. A bond is a certificate stating that the government has borrowed a certain sum of money from the owner.
What is the purpose of issuing a bond?
Communities issue bonds to build roads, schools, and public works.
What best explains why a bond holder is similar to a bank?
Bondholders loan money to bond issuers just asbanks loan money to customers.
Where can you get a surenty bond?
You can obtain a surety bond from insurance companies, surety bond agencies, and sometimes directly from the issuing government agency. It's advisable to shop around and compare quotes to ensure you get the best coverage at a competitive rate.
What was the purpose the bond of 1844?
purpose of the 1844 bond
What is convertable bond?
In finance, a convertible bond is a type of bond that can be converted into shares of stock in the issuing company, usually at some pre-announced ratio.
Best explains why a bondholder is similar to a bank?
Bondholders loan money to bond issuers just as banks loan money to customers.
What best explains why a bondholder is similar to a bank?
Bondholders loan money to bond issuers just as banks loan money to customers.
How do you get a bond for the treasurer of your organization?
The treasurer of your organization can obtain a bond by contacting a bonding agency. The agency will pull a background and credit check on the treasurer before issuing a bond.
What is a principal of a bond?
The principal of a bond is the amount of a bond that interest rates are paid on by the person issuing it. I like to think of it as the initial amount the bond is worth. Example: Hudson Corporation issued a $10,000 bond at 14% interest. The $10,000 is the principal of the bond.
How do you find a cusip bond number for an inmate?
To find the CUSIP bond number for an inmate, you can contact the institution where they are incarcerated or the issuing authority of the bond. You may need specific details about the bond, such as the issuing agency, maturity date, and face value, to accurately identify the CUSIP number.
Who can issue a municipal bond?
A municipal bond can be issued by the local government or the bonds' agencies. Specifically, the bond's issuing can be including states, cities, counties and a lot of other government entities.
Effect of bond issue on balance sheet?
Issuing a bond adds a liability (bond to be paid) and cash as an asset. So, overall the company's b/s increases on both sides.
