--%>
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 : Markets are expected to be Volatile

    When Markets are expected to be Volatile: For the bear and bull strategy to yield gains, it is essential that the trader takes a view on the direction of the market i.e. either bearish or bullish, and accordingly implement the strategic choice. More o

    		•
  • Q : When the dividend shows real money The

    The dividend is the part of the net income which the company distributes to shareholders. When the dividend shows real money, the net income is also real money. Is it true?

    		•
  • Q : Problem on annual obligation payment

    ABC Corp. has a challenge: The CEO wants to set aside annual, end of year payments into a sinking fund account earning 5% over the next 6 years in order to retire $25 million in bonds that will be outstanding at that time. Determine the annual payment required each ye

    		•
  • Q : International financial what can we

    what can we expanded opportinity set of international finance?

    		•
  • Q : Active versus Passive fund managers

    Active vs. Passive fund managers: Passive fund managers adopt a long term buy and hold strategy. Usually, stocks are purchased so that the portfolio’s returns will track those of an

    		•
  • Q : Explain the branching structure of the

    Explain the branching structure of the binomial model.

    		•
  • Q : Explain undervaluation of share on the

    Suppose we calculate g as ROE (1–p)/(1–ROE (1–p)) and the Ke by the CAPM. We replace both values into the formula PER = (ROE (1+g) – g)/ROE (Ke-g) but there PER we obtain is fully different from the one we get by dividing the quotation of the s

    		•
  • Q : Explain Indenture Explain the term

    Explain the term Indenture and also describe their provisions?

    		•
  • 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

    		•
  • Q : Define the term Commercial Paper

    Commercial Paper: It is an unsecured obligation issued by the corporation or bank to finance its short-term credit requirements, like accounts inventory and receivable. Maturities usually range from 2 to 270 days. The commercial paper is accessible in

    		•