--%>

Market for Corporate Bonds

Write some point regarding Market for Corporate Bonds.

E

Expert

Verified

Market for Corporate Bonds:

• At the end of year 2007, the amount of corporate and foreign debt exceptionally was $10.1 trillion, making it the second biggest part of U.S capital market. The biggest was the market for corporate equity, with a value of $20.8 trillion. Finally, the market for state and local government debt totaled around $2.1 trillion.

• The biggest investors in corporate bonds are life insurance companies and pension funds, with trades in such market tending to be in much large blocks of securities.

• Less than 1 % of all corporate bonds are traded on exchanges. Most of the secondary market transactions for corporate bonds occur via dealers in over-the-counter (OTC) market.

• Only a small number of net bonds which exist really trade on a single day. As an outcome, the market for corporate bonds is thin as compared to the market for corporate stocks or money market securities.

• Corporate bonds are very less marketable than the securities which encompass higher daily trading volumes.

• The prices in corporate bond market as well tend to be more volatile than securities sold in markets with higher trading volumes.

• The market for corporate bonds is not as proficient as that for stocks sold on the main stock exchanges or highly marketable money market instruments like U.S. Treasury securities.

   Related Questions in Corporate Finance

  • Q : Real estate problem Eric Rowan is

    Eric Rowan is planning to buy a house for $155,000 by borrowing money at the rate of 9%. He expects to rent the house for 5 years, collecting $20,000 annual rent in advance each year. He thinks that he can sell the house for $175,000 after five years. Fulton has incom

  • Q : Explain realization of name valuation

    I suppose that a valuation consciously realized in my name tells me how much I have to offer for the company, am I right?

  • Q : Problem on financial manager

    Assume that you are a financial manager of Yuen Cheong Manufacturng Company. Due to the rising demand of product X, Yuen Cheong Manufacturng Company decides to open a new production plant in China, so it needs to take a loan of US$1 million. Bank A offers Yuen Cheong

  • Q : State capital formation Capital

    Capital formation: It is an increase in the stock of capital in particular period is termed as capital formation.

  • Q : How can industrial company inflate

    How can any industrial company inflate the value of its inventory so as to decrease net income and the taxes is has to pay in a year?

  • Q : Does the equity of shareholders have

    Does the equity of shareholders represents the savings a company has accumulated by the years?

  • Q : Problem on optimal capital structure

    XYZ Company has debt/assets ratio 50%, that is too high and it must be at 45% to be optimal. This debt reduction must also reduce the bankruptcy costs by $30 million. At present, XYZ has 5 million shares of common stock selling at $50 each. The tax rate of XYZ is 30%.

  • Q : Explain value of shares is Is this

    Is this correct that the value of the shares is, the “value of the results’ capitalization” that, as per to the Institute of Accounting and Auditing (ICAC) shows “the sum of the expected future results of the company throughout a certain period

  • Q : Widgets You are required to submit a

    You are required to submit a bid to supply 200,000,000 widgets per year to the State of Illinois for the next five years. Your company has an idle tract of real estate that cost $1,500,000 ten years ago; if your company sold the land today, it would generate $3,000,000 after the taxes were paid. The

  • Q : Who explained market-neutral delta

    Who explained market-neutral delta hedging?