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In a nutshell, bonds are debt. When a company, government agency or municipal project needs money, they can issue a bond that offers the investor the opportunity to "lend" and in return receive interest on their investment. Depending on the health of the bond issuer, the bond is rated. Bonds considered to be the safest investments are rated AAA while debt issued by questionable (the potential that the bond might not be repaid) agencies receive ratings of a C or below. Low risk bonds pay a small yield while those that are high risk entice investors with a high yield. Think of it this way: If you asked for a loan and your personal credit rating was excellent, you would be offered the best lending rate. Conversely, if you were a high risk borrower with poor credit history, you would be subject to higher interest rates based on your ability (or your perceived ability) to pay it back. This is basically how the bond market works.
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Comment on the statement The bond market is primarily an OTC market?
Yes, because bonds are not listed on an exchange but rather priced and sold between dealers and traders. They are not regulated like the listings on exchanges. The bond market is very archaic. You can't get a quote for a bond on any of the major exchanges. If you want to sell a bond, your broker shops around for a buyer, making up to 2 or 3 phone calls to get a bid offer.
Bonds usually sell at a premium when?
when interest rates in the general market fall. This makes the interest rate on the bond relatively more attractive.
What is the difference between stock market and bond market?
Equity is bought and sold in the stock marketwhile debt is bought and sold in the bond market.
What time does the bond market close?
On any typical day, the bond market closes at 5:00 PM eastern standard time. The bond market then reopens the next day at 9:30 AM eastern standard time.
Is the Bond market bigger than equity market?
Yes! About 3 times the size.
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.
How can FED purchase bond while others are holding it..Shouldn't bond holders have the right to decide whether to sell their bonds or not?
The FED doesn't force people to sell, it just buys from willing sellers in the market.
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.
What is the difference between a primary and a secondary market?
A primary market is the main market to which you are selling.A secondary market is an additional market to which you are selling.AnswerA primary offering, such as with a corporate bond, means you are buying it directly from the issuer, at par value, usually. A secondary market is where you sell or buy existing issues. I.E. If you bought a bond last year, now need to get your principal, you can sell it in the secondary market. You may not get par value. If rates are up since you bought the bond, then you will likely have to sell it at a discount to be able to get rid of it. If rates have fallen since you bought it, you could get a premium for it..
A company that wanted to increase its capital through equity financing would most likely get involved in which market?
bond market my fellow peeps
When market interest rates exceed a bond's coupon rate the bond will?
When market interest rates exceed a bond's coupon rate, the bond will:
Comment on the statement The bond market is primarily an OTC market?
Yes, because bonds are not listed on an exchange but rather priced and sold between dealers and traders. They are not regulated like the listings on exchanges. The bond market is very archaic. You can't get a quote for a bond on any of the major exchanges. If you want to sell a bond, your broker shops around for a buyer, making up to 2 or 3 phone calls to get a bid offer.
Bonds usually sell at a premium when?
when interest rates in the general market fall. This makes the interest rate on the bond relatively more attractive.
Define bond yield?
is the yield of a bond in the market
Should you sell GM bonds at the current market price of 2-3 dollars per bond or hold?
I would like to buy some.
What is the difference between stock market and bond market?
Equity is bought and sold in the stock marketwhile debt is bought and sold in the bond market.
Will the bond market collapse?
No.
