"Bond" Essays and Research Papers

Bond

perpetual bond is currently selling for RS. 95/-. The coupon rate of interest is 13.5%. The approximate discount rate is 15%. The value of the bond and the YTM is: (a) Rs. 90/- and 14.2% Value is (13.5*15%=90) and YTM is ((13.5/95)*100=14.21%) (b) Rs. 100/- and 13.5% (c) Rs. 90 and 15% (d) Rs. 90/- and 13.5% 902. In 2001, Meridian Ltd. has issued bonds of Rs. 10,000/-each due in 2011 with a 14% per annum coupon rate payable at the end of each year during the life of the bond. If the required...

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Bonds

BOND PROBLEM SOLUTIONS 1. Six years ago, The Corzine Company sold a 20-year bond issue with a 14 percent annual coupon rate and a 9 percent call premium. Today, Corzine called the bonds. The bonds originally were sold at their face value of $1,000. Compute the realized rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price. PV = 1000; N = 6; PMT = 140; FV = 1090; CPT I/Y I/Y = 15.02% 2. You just purchased...

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Bonds

NAME: MASSAWE BARAKA, REG. NO: 2010-04-03894. 12 FINANCE 202 INDIVIDUAL ASSIGNMENT UDBS Consider a 10 year bond that has a face value shs 1000, a coupon rate of 6% and pays interest once a year. (a)Suppose person A bought this bond at par when it was initially issued and sold it 1 year later to person B for shs 1024.What is B’s total return? Soln Total return =[ Interest paid +(selling price – buying price)]/buying price Given; Annual interest paid = coupon rate x par value, coupon...

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Bonds: Bond and Cash Flow

BONDS Bonds pay fixed coupon (interest) payments at fixed intervals (usually every six months) and pay the par value at maturity. Par value = $1,000 Coupon = 6.5% or par value per year, or $65 per year ($32.50 every six months). Maturity = 28 years (matures in 2032). Issued by AT&T. Types of Bonds Debentures - unsecured bonds. Subordinated debentures - unsecured “junior” debt. Mortgage bonds - secured bonds. Zeros - bonds that pay only par value at maturity; no coupons. Junk bonds - speculative...

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Bond Valuation

Value of Money to Security Valuation – Valuation of Bonds and Debt Securities A bond or a debenture is a long term debt instrument carrying a fixed rate of interest which is known to investors. A bond is redeemable after a specified period. Bonds are also called gilt edged securities or gilt when issued by the government since it is free of default risk. Features of a Bond or Debenture • Face Value – Face value is called par value. A bond / debenture is generally issued at a par value and...

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Stocks and Bonds

In the financial markets, the most common forms of marketable securities are stocks and bonds. Though they have some similarities to each other, they differ greatly in many aspects. Broadly speaking, both financial instruments enable one to invest in corporations, public and/or private, with possible profitable returns in the future. Stocks (or shares), by definition, are shares of ownership in a company. By purchasing stocks in a company, the investor becomes a part owner, and thereby owns a percentage...

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international bonds

Tutorial 2 Q1. Why do most international bonds have high Moody’s or Standard & Poor’s credit ratings? Credit Rating is a social intermediary service to provide credit information and reference for the community. Credit rating is aim to show the size of a credit default risk the rating object, rating agencies focus on financial conditions and historical data to give the overall valuation of object. Currently, credit rating on the issue of international bonds is the popular investment risk valuation...

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Bonds and Shares

borrowing money by issuing bonds is that interest payments, unlike dividends, are tax-deductible. But interest has to be paid even in a year in which a company makes no profit, so it is safer to have equity capital as well, on which no dividends need be paid if there are no profits. 4/29/2014 3 4 • What are differences between bonds and shares? Stocks and Bonds Which security is better? 4/29/2014 4/29/2014 5 1 4/29/2014 STRUCTURE BONDS - a form of debt with...

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Bond Valuation

Assignment for Week -2 Chapter 5 (5 - 9) Bond Valuation and Interest Rate Risk Bond L Bond S INS = $100 INS = $100 M = $1,000 M = $1,000 N = 15 Years N = 1 Year a) 1) rd = 5% VBL = INT/ (1 + rd)t + M/ (1 + rd)N =INT [1/rd – 1/ rd(1 + rd)N ] + M/ (1 + rd)N =$100 [1/0.05 – 1/ 0.05(1 + 0.05)15] + $1,000/ (1 + 0.05)15 ...

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Stock and Bond

stocks and bonds which can be a sign of the company’s financial standing in a market. Since investors are risk averse and they would not like to put their money on stocks and bonds of a struggling company, but they would like to put their money on stocks and bonds of a stable and a progressing company. Investors benefit from company’s profit in the form of dividend when they buy a company’s stocks and investors can get higher or lower yield based on the bonds. This is the rationale behind bonds’ and stocks’...

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Bond and Percent

Week 3 Time Value of Money and Valuing Bonds Chapter 6 55. Amortization with Equal Payments Prepare an amortization schedule for a five-year loan of $36,000. The interest rate is 9 percent per year, and the loan calls for equal annual payments. How much interest is paid in the third year? Answer: $2,108.52 56. Amortization with Equal Principal Payments Rework Problem 55 assuming that the loan agreement calls for a principal reduction of $7,200 every year instead of equal annual payments. Answer:...

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Bonds and Stocks

Corporate Bonds, Common stock, and Preferred Stock Higher return means higher risk. People use excess money to invest in a corporation. It is a good way gain more money than put money into the saving account to get a little interest. Before you invest you should analyze the characteristics of corporate bonds, common stock, and preferred stock; and also be aware of their advantages and disadvantages. The corporate bonds are issued by corporations. They are used to increase capital for issuing...

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CAT bond

main advantages and disadvantages of CAT bonds compared to (re)insurance from the perspective of the party seeking protection. The first main advantage of CAT bond compared to reinsurance, in terms of the party seeking protection, the Sponsor,Munich Re in our case, is that CAT bond ,which is Queen Street II Captial Ltd in our case ,allows the Munich Re to transfer the catastrophe risks (North Atlantic U.S.hurricane and European windstorms) to the CAT bond investors via SPRV, Queen Street II Capital...

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Bond Valuation

HW Bond Valuation and Bond Yields Clifford Clark is a recent retiree who is interested in investing some of his savings in corporate bonds. His financial planner has suggested the following bonds: • Bond A has a 7% annual coupon, matures in 12 years, and has a $1000 face value. • Bond B has a 9% annual coupon, matures in 12 years, and has a $1000 face value. • Bond C has an 11% annual coupon, matures in 12 years, and has a $1000 face value. Each bond has a yield to maturity (YTM) of...

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Convertible Bond

Convertible Bonds A convertible bond is a bond that can be converted into shares of common stock. Therefore, these are two sources of value for this security: the value of the bond components, and the value from possibly converting the security into shares of common stock. Features of a Convertible Bond The basic features of a convertible bond can be illustrated by a hypothetical example. On November 1, 2003 ("today"), Apple, had $400 million in 8.80 percent (annual payments) convertible bonds due in...

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Key Features of a Bond

of a bond? answer: if possible, begin this lecture by showing students an actual bond certificate. We show a real coupon bond with physical coupons. These can no longer be issued--it is too easy to evade taxes, especially estate taxes, with bearer bonds. All bonds today must be registered, and registered bonds don't have physical coupons. 1. Par or face value. We generally assume a $1,000 par value, but par can be anything, and often $5,000 or more is used. With registered bonds, which...

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Bond and Coupon Rate

The corporate bond market is “thin” compared to the market for money market securities or corporate stocks. a) true Prices in the corporate bond market tend to be less volatile than prices of securities sold in markets with greater trading volumes. a) False All other things being equal, a given change in the interest rates will have a greater impact on the price of a low-coupon bond than a higher-coupon bond with the same maturity. a) True If investors believe inflation will be increasing in the...

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Municipal Bond

Excerpt from FS Series #1: enabling sub-sovereign bond issuances B3. Case 3: Alternative Financing for Water Utilities — Lessons from a Failed Bond Issue in Indonesia B3a. Background and Environment PUBLIC INVESTMENT IN THE WATER SECTOR HAS BEEN VIRTUALLY ABSENT IN INDONESIA. ACHIEVING INDONESIA’S MILLENNIUM DEVELOPMENT GOAL, TO HALVE THE PROPORTION OF PEOPLE WITHOUT SUSTAINABLE ACCESS TO SAFE DRINKING WATER AND BASIC SANITATION BY 2015, WOULD REQUIRE A TENFOLD ANNUAL INCREASE IN INVESTMENTS...

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Vietnam Bond Market

from the banks, issuing stocks or issuing bonds. However, when the interest rate of borrowing from banks is very high due to high inflation, together with the stock market is quite instable; calling for capital from bond market is much more preferred by investors. In the context of this report, some major points regarding the bond market in Vietnam are presented. Firstly, a common picture about the Vietnam bond market is drawn. Next come the types of bonds and major participants in this market. Finally...

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Convertible Bond

The characteristic of a convertible bond The convertible bond is one kind of equity-linked bonds. The term of the bond entitles bondholder to convert bonds into shares of the company or another company in the same group, at an agreed-upon conversion price, among a fixed period. The reason why it is made in this form is that the issuer can benefit from four aspects as follow, (1) better terms. A convertible bond have a lower interest rate, less restrictive covenants or the subordination of bondholders'...

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Bond Market in India

BONDS MARKET IN INDIA What are Bonds? A bond is a debt security in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals. Thus a bond is like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor), and the coupon is the interest. Bonds have a maturity...

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Worldcom Bond Issuance

CORPORATE BOND ISSUANCE 1. IS IT A GOOD TIME FOR WORLDCOM, INC. TO ISSUE? CONSIDER FACTORS IN FAVOR AND FACTORS THAT ARE NOT IN FAVOR. Personally I believe that the time is not in favor of WorldCom in undertaking one of the largest bond issues at the time. Even though there are many advantages with proceeding with the issue, I believe that the degree and the uncertainty raised by some of the disadvantages outweigh the advantages of going ahead with the $6Billion bond. In the...

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Nature of different bond

1. The security of the bond, that is, whether the bond has collateral. Effect on the coupon rate of the bond issue: Bond’s with collateral will have lower coupon rate as bondholders have claim on collateral no matter what. Advantage: It provides an asset which lower default risk. Disadvantage: Companies cannot sell this collateral as an asset and need to maintain it. 2. The seniority of the bond Effect on the coupon rate of the bond issue: The more senior the bond, the lower the coupon...

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Bond and Numerical Examples

marks) The yield to maturity on a bond is: (a) based on the assumption that any payments received are reinvested at the coupon rate of return. (b) based on the assumption that any payments received are reinvested at the current yield. (c) below the coupon rate when the bond sells at a discount, and above the coupon rate when the bond sells at a premium. (d) none of the above. B. (2 marks) In which one of the following cases is the bond selling at a premium? (a) Coupon...

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Finance: Bond and Percent

annual interest income from the TIPS bond? From the Treasury note? b. How much interest will Judy receive over the five years from the Treasury note? From the TIPS? c. When each bond matures, what par value will Judy receive from the Treasury note? The TIPS? d. After five years, what is Judy's total income (interest + par) from each bond? Should she use this total as a way of deciding which bond to purchase? P4 4. Assume a $1,000 face value bond has a coupon rate of 8.5 percent, pays...

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Investing Stocks and Bonds

Stocks and Bonds Stocks and Bonds are different in many ways. A stock is a portion or share of the ownership of a corporation. A share will give the owner of the stock the company’s profits or loses over time. The good thing about stocks is they can be sold at almost any time as long as there is someone willing to buy. A bond, on the other hand, is a fixed interest financial asset issued by governments, companies, banks, and other large entities. Bonds also are called funds. Bonds pay the owner...

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Stocks: Bond and Preferred Stock

event of liquidation. Answer True False 1 points   Question 2   Junk bonds are also called high-yield bonds. Answer True False 1 points   Question 3   The expected yield on junk bonds is lower than the yield on AAA-rated bonds because of the higher default risk associated with junk bonds. Answer True False 1 points   Question 4   In general, interest on bonds, like dividends on preferred stock, may be deferred until a later date at the discretion...

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RIL Bonds Case

RIL Bonds The Reliance Group has its businesses in the energy and materials value chain. The annual revenue of RIL is in excess of US$ 34 billion. RIL is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals,...

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MORTGAGE BACKED BOND

MORTGAGE BACKED BOND (MBB) WHAT IS IT MBBs are the third asset securitization vehicles. They differ from pass-thru and CMOs in 2 key dimensions: 1. Pass thru’ and CMOs remove mortgages from bank’s balance sheets as forms of offbalance sheet securitization. 1. MBBs normally remain on the balance sheet 2. Pass thru’ and CMOs have a direct link between the cash flows on the underlying mortgages and the cash flows on the bond vehicles 2. For MBBs, there is no direct link between the cash flow on...

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Valuation of Bonds

VALUATION AND MANAGEMENT  OF BONDS All Rights Reserved © Oxford University Press, 2011 2 CONTENTS   Introduction Features of the bond      Face Value l Coupon Rate Periodicity of coupon payments Maturity  Redemption Value Fixed and Floating Rate Bonds Indexed Bonds Callable & Puttable Bonds C ll bl & P tt bl B d Zero Coupon and Deep Discount Bonds   Convertible Bonds CHAPTER 6  Types of Bonds Types of Bonds       Cash Flow of the bond VALUATION & MANAGEMENT OF BONDS 3 ...

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Corruption in Bail Bonds Business

Corruption of Running a Bail Bonds Business As early as 1912 – over one hundred years ago – critics were concerned that poor people remained in jail while awaiting trial solely because of their inability to pay even small bail amounts, that bail bondsmen had become too prominent in the administration of justice and that corruption plagued the industry. The Justice Policy Institute (JPI) feels that the bail bonding industry stands in the way of fair and effective pre-trial justice with much backed...

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Financial: Bond and Money Market

their loans. The banks that profit on these interest payments and the businesses use the loans to generate more income for themselves. Since money market accounts are frequently used in mutual funds, you can easily enter into buying stock shares or a bond fund. Question #10 Which of the money market securities is the most liquid and considered the most risk free? Why? -The U.S. Treasury Bill or T-bills are sold by the government to raise money. They are the most marketable securities in the money...

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Finance: Bonds

of the following events would make it more likely that a company would choose to call its outstanding callable bonds? a. The company’s bonds are downgraded. b. Market interest rates rise sharply. c. Market interest rates decline sharply. d. The company's financial situation deteriorates significantly. e. Inflation increases significantly. . A 10-year bond with a 9% annual coupon has a yield to maturity of 8%. Which of the following statements is CORRECT? ...

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Bond and Net Asset Value

usually cumulative 9. __________ is not a true statement regarding municipal bonds. A) A municipal bond is a debt obligation issued by state or local governments. B) A municipal bond is a debt obligation issued by the Federal Government. C) The interest income from a Municipal bond is exempt from federal income taxation. D) The interest income from a Municipal bond is exempt from state and local taxation in the issuing state. 10. In a...

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Stock and Treasury Bonds

during the period versus what they should have been had the decision been made not to expand in China. c. The company holds about half of its assets in the form of US Treasury bonds, and it keeps these funds available for use in emergencies. In the future, though SSC plans to shift its emergency funds from Treasury bonds to common stocks. Discuss how SSC’s stockholders might view each of these actions and how the actions might affect the stock price. ANSWER: A. B. TRANSACTION B is an...

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Bond and Rate

is settled on day 210? 2. Using information in Table 7.1, complete the following: (a) Given the zero-coupon bond prices, compute the implied forward rates from time 1 to time 2, time 2 to time 3 and time 1 to time 3. (b) Calculate the implied coupon rate of a 2-year par coupon bond that will be issued at time 1. 3. Suppose the coupon rates for 1-year, 2-year, and 3-year par coupon bonds are 5%, 5.97%, and 6.91%, respectively. (a) Compute the implied effective annual forward rate between year 1...

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Bibliography: Bond and Financial Markets Association.

October 2013 from: http://www.investopedia.com/terms/q/quantitative-easing.asp 2) InvestorGuide Staff. (2013). Yield, Duration and Ratings of Bonds. (Online). Retrieved on 8 October 2013 from: http://www.investorguide.com/article/11675/yield-duration-and-ratings-of-bonds-igu/ 3) The Securities Industry and Financial Markets Association. (2010). Types of Bonds: How Do Credit Ratings Affect Yields? [Online]. Retrieved on 8 October 2013 from: http://www.investinginbonds.com/learnmore.asp?catid=5&subcatid=19&id=190 ...

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Bonds vs Stocks Research paper

In the case of bankruptcy, bonds generally provide more safety than stocks. You can read more about why here. Bonds vs. Stocks: Lender vs. Shareholder When you buy a stock, what you are buying is a small piece (or a large piece if you are someone like Warren Buffet!) of ownership in a company. As an owner you have special privileges, including the ability to vote on matters that affect the future of the company. More importantly however, is the fact that as a stockholder you have the right...

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Home Products stock and bond valuatio

Home Products stock and bond valuation HOME PRODUCTS - Case 9 STOCK AND BOND VALUATION In all textbooks, the valuation of stocks and bonds is simply stated as the present value of all the future cash flows expected from the security. The concept is logical, straightforward, and deceptively simple. The valuation of bonds is usually presented first, since the relatively certain cash flows are broken into an annuity and a payment of the par value at some specific date in the future...

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General Host; Accounting for a Bond Refunding

Year | 5% Bonds | 11% Bonds | 1975 | $1.695 | $2.233 | 1976 | $1.695 | $2.233 | 1977 | $1.695 | $2.233 | 1978 | $1.695 | $2.233 | 1979 | $1.695 | $2.233 | 1980 | $1.695 | $2.233 | 1981 | $1.695 | $2.233 | 1982 | $1.695 | $2.233 | 1983 | $1.695 | $2.233 | 1984 | $1.695 | $2.233 | 1985 | $1.695 | $2.233 | 1986 | $1.695 | $2.233 | 1987 | $1.695 | $2.233 | 1988 | $35.595* | $22.533* | *Face value and interest (In millions) 1. $33.9 million (Face value) X 5% (Coupon...

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Corporate Bonds - Business Finance 101

Bond - is defined as a long-term debt of a firm or the government set forth in writing and made under seal. Kinds of Bond 1. Government Bonds - are those issued by the government to finance its activities. 2. Corporate Bonds - are those issued by private corporations to finance their long -term funding requirements. Bonds as Distinguished from Stocks 1. A bond is a debt instrument while stock is an instrument of ownership. 2. Bondholders have priority over stockholders when payments...

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Worldcom, Inc Corporate Bond Issuance

WORLDCOM, INC: CORPORATE BOND ISSUANCE Introduction This case raises many interesting questions concerning the record setting issuance of corporate debt by WorldCom, Inc. (“WorldCom”). Both the surprisingly voluminous structure of the proposed issuance and the foreboding macro-economic climate in which it was slated spark concerns over the risk and cost of the move. One of the first questions that must be addressed is whether WorldCom’s timing was appropriate. Next, the company’s choice of...

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Bond and Rate

is settled on day 210? 2. Using information in Table 7.1, complete the following: (a) Given the zero-coupon bond prices, compute the implied forward rates from time 1 to time 2, time 2 to time 3 and time 1 to time 3. (b) Calculate the implied coupon rate of a 2-year par coupon bond that will be issued at time 1. 3. Suppose the coupon rates for 1-year, 2-year, and 3-year par coupon bonds are 5%, 5.97%, and 6.91%, respectively. (a) Compute the implied effective annual forward rate between year 1...

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Home Products: Stock and Bond Valuation

discusses the valuation of stocks and bonds. It says that in textbooks, the valuation of stocks and bonds is simply stated as the present value of all the future cash flows expected from the security. The concept is logical, straightforward, and simple. The valuation of bonds is usually presented first, since the relatively certain cash flows are broken into an annuity and a payment of the par value at some specific date in the future. Preferred stock valuation follows bond valuation and the value of preferred...

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Bond Analysis

Chapter 10: Bond Return and Valuation Q. 6. Find out the yield to maturity on a 8 per cent 5 year bond selling at Rs 105? Solution: Yield to Maturity = [pic] = [pic] = [pic] × 100 = [pic] × 100 YTM = 6.82. Q. 7. (a) Determine the present value of the bond with a face value of Rs 1,000, coupon rate of Rs 90, a maturity period of 10 years for the expected yield to maturity of 10 per cent. (b) In N is equal to 7 years in...

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Futures Contract and Zero-coupon Bond Rate

(a) the six-month zero-coupon bond rate is calculated as follows: Rm=[m*(FV-PV)]/PV Rm=[2*(100-98)]/98=0.0482 Then this is converted into a continuously compounding rate: Rc=m*ln(1+Rm/m) Rc=2*ln(1+0.0482/2)=0.04763 The 1 year zero-coupon bond rate is calculated as follows: Rm=[1*(100-95)]/95=0.05263 Then this is converted into a continuously compounding rate: Rc=1*ln(1+0.05263/1)=0.05129 The 1.5 year zero-coupon bond rate is calculated as follows: ...

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Exchange Traded Bonds and Sukuk (Etbs)

Exchange Traded Bonds and Sukuk (ETBS) Bonds/Sukuk have always been seen as an asset class to hedge when markets are bearish and a means to develop a steady income over many years. But in the past the bonds/sukuk market was accessible only to high net worth and institutional investors. Now with ETBS, all investors can have access to the bond/sukuk market with ease, via the stock market.  What are ETBS ETBS are fixed income securities, also known as bonds or sukuk*, that are listed and traded...

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The Overview of the Australian Bond Market

The overview of the Australian bond market Nowadays, bonds are playing an increasing important role in investors’ portfolios, and which is defined as is a fixed interest type of investment option that would repay the principal and interest on a certain date in the future. By diversification, bonds also do a great contribution in reducing the risk of shares and property securities portfolio. The importance of the bond market has been realized by investors and bonds have been an important investment...

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Us Bond Market

You have been asked to write a training document about the US Bond Market for use in the new employee-training program. In your document, you must make sure to address each of the following: 1a: The key players in the market; and the types of investments available to both individual investors and institutional investors, Bond Characteristics A bond is a "security" which gives the holder a financial claim on the issuer. This claim protects the holder in circumstances in which the issuer is...

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Bond Market Trends

Topic 2 Bond market developments Overview Financial markets have been subject to significant changes in recent years due to the credit crisis. Experts believed that risk was being under-priced, which was expressed in the markets by a narrow spread. They believed that once the market corrected this under-pricing and re-priced the risk, it would likely cause a dislocation in financial markets by overshooting its equilibrium. Hence the prices, yields and returns on bonds have been significantly...

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Bond Market Power

Bond Market Power: The reasons behind James Carville's quote stating that if he would want to be reincarnated as the Bond Market as appose to a political figure or religious leader (Ferguson, N, 2008) is clear, the Bond market since its inception over 800 years ago has been the most influential financial instrument throughout history. Its longevity and power far surpasses any leader. It affects the outcome of wars, the success and failures of even the largest economies and also touches the lives...

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arbitrage in the government bond market

discrepancies in the prices of multiple long maturity US Treasury bonds seemed to appear in the market. An employee of the firm Mercer and Associates, Samantha Thompson, thought of a way to exploit this opportunity in order to take advantage of a positive pricing difference by substituting superior bonds for existing holdings. Thompson created two synthetic bonds that imitated the cash flows of the 8¼ May 00-05 bond; one for if the bond had been called at the year 2000, and one for if it hadn’t been...

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Bonds

Using present value to value bonds A bond, from the perspective of the person issuing the bond is a form of long term debt. In the hands of the person who has acquired the bond it is an asset. The agency issuing the bond agrees to pay a fixed sum of money to the holder of the bond for a period of years and then, at the end of that period, to pay back the face value of the bond. Bonds can be issued by a variety of agencies/companies: 1. Municipal bonds: issued by cities, states and...

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bond case mutual of seattle insurance company

Bond Case Sam Strother and Shawna Tibbs are vice presidents of Mutual of Seattle Insurance Company and co-directors of the company’s pension fund management division. An important new client, The North-Western Municipal Alliance, has requested that Mutual of Seattle present an investment seminar to the mayors of the represented cities, and Strother and Tibbs, who will make the actual presentation, have asked you to help them by answering the following questions. 1) What are the key features of...

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The Harvard Management Company and Inflation-Protected Bonds

The Harvard Management Company and Inflation-Protected Bonds 1(a) Regular Treasury bonds are purchased at face value in the beginning or an adjusted price prior maturity. And in every period, normally annul or semiannual, investor will receive a coupon as an interest and at the maturity a principal plus coupon. (b) Coupon and principal of the Regular Treasury bonds are fixed, therefore if the inflation rate increases in the forecasting future, investor will receive the same amount of coupon...

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The Role of Eurodollar Bond Issuance in Emerging Markets

The role of Eurodollar bond issuance in Emerging Markets Eurodollar bonds are U.S. dollars held in banks outside the United States by a non US organization. They pay interest and principal in Eurodollars. These bonds are not registered with the Securities and Exchange Commission. Due to fewer regulatory restrictions and costs in the Euromarkets, Eurodollar bonds can be sold at lower than U.S. interest rates. Eurodollar bonds are one of the more common Eurocurrency bonds because of the international...

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Why I Want to Execute Traning Bond

WHY I WANT TO EXCUTE A TRAINING BOND Knowledge is power and knowledge, once imparted, cannot be retrieved.Organizations make very important investments in its people ’s knowledge by way of trainings, and asexpected from any investment, returns in form of improved work quality, increased productivity, lowerturnaround times, higher profits and/ or a larger market share are expected.Signing a training bond is predominantly conceived to be a form of legalized and consented ‘ employeeslavery ’ ...

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Corning Inc., Zero Coupon Convertible Bonds

Case: Corning Inc., Zero coupon convertible Bonds Cornhill needs funds to the order of $ 3.6 billion in cash to complete the acquisition of Pirelli. The company currently is planning to come up with an equity issue to raise $ 2.1375 billion at $ 71.25 per share. The remaining part of the fund requirements is furbished using zero coupon convertible debentures due in 2015, priced at $ 741.923 per $ 1,000 principal amount. This offering price yields 2% p.a. compounded semi-annually. Corning is raising...

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Bonds

INTRODUCTION - The Swan Davis Corporation case focuses on following issues: • The importance in bond and stock valuation; • The capital structure of the company; and • How they effects to the capital budgeting decisions of the company. - Swan- Davis Inc., (SDI) manufactures equipment for sale to large contractors, the company was found in 1976 and it went to the public in 1980 at its shares value risen from $1 to $15 since it enter to the market. - The financial statements for the past three...

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Capital Asset Pricing Model and Bond Yield

JMSB Analysis Group Date: December 2009 Group members: Jun Gao Jiaqi Yin Qing Zhang Antoine Vulcain Main issues: Evaluation of two possible products: 1. NPV of two possible products 2. WACC analysis --CPAM --Bond yield plus Recommendation: Product B(aircraft) will be suggested due to the situation of the company. ---If there are enough funds for the company, product A is also acceptable Analysis Summary: High Mountain as...

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