 Bond basicsMoorad Choudhry
Chapter Chapter 2 in Bonds, 2006, pp 17-46 from Palgrave Macmillan Abstract: Abstract Bond and shares form part of the capital markets. Shares are equity capital while bonds are debt capital. So bonds are a form of debt, much as a bank loan is a form of debt. Unlike bank loans, however, bonds can be traded in a market. A bond is a debt capital market instrument issued by a borrower, who is then required to repay to the lender/investor the amount borrowed plus interest, over a specified period of time. Bonds are also known as fixed income instruments, or fixed interest instruments in the sterling markets. Usually bonds are considered to be those debt securities with terms to maturity of over one year. Debt issued with a maturity of less than one year is considered to be money market debt. There are many different types of bonds that can be issued. The most common bond is the conventional (or plain vanilla or bullet) bond. This is a bond paying regular (annual or semiannual) interest at a fixed rate over a fixed period to maturity or redemption, with the return of principal (the par or nominal value of the bond) on the maturity date. All other bonds are variations on this. Keywords: Interest Rate; Cash Flow; Bond Price; Interest Rate Risk; Clean Price (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-62726-0_2 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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