0
Add your answer:
Earn +20 pts
When are issuers more likely to call an outstanding bond issue?
If the bond is 'callable' th issue will likely call it when yields fall as they can then refinance more cheaply.
How do company arrange the external sources of funds?
Companies can issue a bond offering.
Are insurance companies part of capital market?
Yes, The insurance companies are parting their money in stock/bond market,collected under Unit linked insurance policies and are therefore part of the capital market, no doubt about it.
What type of bonds cant be sold on the secondary market?
Bonds are traded between investors in the secondary market. However, unlike stocks, most bonds are not traded in the secondary market via exchanges. In the secondary market transactions, the bond does not have to be traded for its original issue price.
Order the events in the life of a bond from earliest to latest A bond maturity B bond issue C coupon payment?
1)bond issue 2)coupon payment 3)bond maturity
When are issuers more likely to call an outstanding bond issue?
If the bond is 'callable' th issue will likely call it when yields fall as they can then refinance more cheaply.
What are the institutional use of bond markets?
All types of financial institutions participate in the bond markets. Commercial banks, savings institutions, and finance companies commonly issue bonds in order to raise capital to support their operations. Commercial banks,savings institutions, bond mutual funds, insurance companies and pension funds are investors in the bond market. Financial institutions dominate the bond market in that they purchase a very large proportion of bonds issued.
How do company arrange the external sources of funds?
Companies can issue a bond offering.
Who dominates the bond market?
The bond market is dominated by institutional investors, such as insurance companies, mutual funds, and pension funds, but bonds can be purchased by individual investors as well.
What is the corporate bond market?
The bond market (also known as the credit, or fixed income market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the Secondary market, usually in the form of bonds.
The Impact of the Worldwide Bond Market?
The bond market is a financial market where the investors buy and sell debt securities. These debt securities are usually bonds. The last study done in 2009 indicated that the global bond market is around $82.2 trillion dollars. The U.S. bond market has outstanding bonds that are approximately $31.2 trillion dollars. There are different sources that report the outstanding amounts. BIS reports that the U.S. amount of outstanding bonds totals $31.2 trillion. SIFMA reports that the outstanding bond market amounts are approximately $34.3 trillion dollars. The vast majority of the trading volume in the U.S. is done with brokers-dealers and large institutions. Many of these bonds are listed on the exchanges. Furthermore, most of the bonds are government bonds that are on the market. The government bond market are bonds with low risk, size, and lack of credit risk. The bond market is also used to show changes in interest rates. It also can refer to the shape of the yield curve. The Securities Industry and Financial Markets Association uses five different categories to classify the different type of bond markets. The following classifications represent the categories of bond markets: corporate, government and agency, mortgage backed, funding, and municipal. People that participate in the bond market are either buyers or sellers. These participants can be any of the following parties: governments, institutional investors, traders, and individuals. Additionally, a large number of outstanding bonds are held by pension and mutual funds. Only 10% of individuals in the United States actually hold bonds. The research in 2009 indicates that over 91 trillion dollars is outstanding on the global bond market. The domestic bonds account for 70% of this figure and the international bonds account for the remainder. The United States is still currently the largest market. The U.S. holds 39% of the market. Japan comes in second by holding 18% of the market. Mortgage-backed bonds account for about 1/4 of the outstanding bonds in the United States. The sub-prime portion of the market is estimated to account for between 500 billion and 1.2 trillion dollars. Also, treasury and corporate bonds account for 1/5 of the outstanding bonds in the U.S. In conclusion, the bond market is a huge part of the investment market in the U.S. and around the world. Many investors like the relatively safe risks that are involved with government bonds and other low risk bonds.
Are insurance companies part of capital market?
Yes, The insurance companies are parting their money in stock/bond market,collected under Unit linked insurance policies and are therefore part of the capital market, no doubt about it.
Why do companies issue Floating Rate instruments?
During times when cash is hard to raise for business expansion purposes, the market interest rates are usually high. Though this is not a permanent situation, if a company offers a fixed rate bond at the prevailing rate, it would have to continue to make the payments until the bond maturity. There are chances that the situation may improve and market interest rates come down. In such cases, companies that raised money at higher rates a few years/months back are going to lose a lot of money. Floating rate notes are an easy alternative wherein, the payments made out to investors are going to be in line the prevailing market interest rates. Companies that need cash and predict the market rates to fall usually issue FRNs
What is an example of what's sold in a bond market?
In the bond market, government and corporate bonds are typically sold. These are debt securities that entities issue to raise capital. Investors purchase these bonds with the expectation of earning interest over time.
What is market rate of bond?
Market rate of bond is that rate at which that bond will be sale in market and it is different from face value of bond as well as book value of bond.
A company that wanted to increase its capital through equity financing would most likely get involved in which market?
bond market my fellow peeps
What is Euro Convertible Bond?
A convertible bond is a bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder. An Euro convertible bond is a bond issued by a company in a market other than its country of operation. Certain countries do not permit issue of ECBs by its companies since till the time of conversion the amount will add to the external debt of the country.
