--%>
Assignment Help - homework help

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 : Explain investment of bank for

    When my company is not listed, therefore the investment banks apply an illiquidity premium. In fact, they say this is an illiquidity premium but then they call this a small cap premium. Only one of the banks, apparently based upon Tit

    		•
  • Q : Which parameter good measures value

    Which parameter good measures value creation; the Economic Value Added (EVA), the CVA (Cash Value Added) or the economic profit?

    		•
  • Q : Company Valuation Project Hello, Need a

    Hello, Need a top-notch finance expert to complete a company valuation assignment for me for a class. Will attach details. Please inform me if you have your graduate level resource who is good with company valuations and executive summary writeup of the analysis please. English writing skills ar

    		•
  • Q : Problem on exponential growth rate

    Atlanta Company stock is predicted to follow an exponential growth rate. The relationship among the current stock price P0, future price PT after time T, and continuously compounded rate of the return r, is: PT = P0eγT. The stock doesn’t pay any

    		•
  • Q : Earnings management What do you mean by

    What do you mean by Earnings management and what are their actions and activities?

    		•
  • Q : Define Effective Utilization of Funds

    Effective Utilization of Funds: It is just the decision to maximize the return on investment of funds. When finance manager is not capable to raise the return by investing fund in profitable assets or other profitable projects, company’s busines

    		•
  • Q : Public Finance which type of tax,

    which type of tax, direct or indirect is applicable in underdeveloped countries? Why? Show your critical areas and weaknesses.

    		•
  • Q : Is this better to repurchase shares or

    Assuming a company needs to distribute money to shareholders of it, is this better to repurchase shares or to distribute dividends?

    		•
  • Q : What is the required rate of return on

    Woidtke Manufacturing's stock currently sells for $29 a share. The stock just paid a dividend of $2.50 a share (i.e., D0 = $2.50), and the dividend is expected to grow forever at a constant rate of 9% a year. What st

    		•
  • Q : Problem about commercial and fiscal

    A court assigned to me (as an auditor and economist) a valuation of a market butcher’s. The butcher’s did not give any simple income statements or any valuable information that I could use in my valuation. This is a small business with just two workers, th

    		•