--%>

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 : Shall we use the arithmetic mean or the

    The market risk premium is the difference between the historical return on the stock market and the return on bonds. But how many years does “historical” imply? Shall we use the arithmetic mean or the geometric one?

  • Q : State Transition Management Transition

    Transition Management: It is a financial service accessible to institutional investors who require making significant modifications to their portfolios, like merging, selling, or substantially restructuring them. This procedure can expose investors to

  • Q : Porters Secondary activities Porter's

    Porter's Secondary activities: 1. Procurement: • Identification process of raw material.• Identification process of identifying probable suppliers.• Process of purchasing and calling quotes. 2. Human Resource management:

  • Q : APR of Loan When you take out an $8,000

    When you take out an $8,000 car loan that calls for 48 monthly payments of $225 each, then what is the APR of loan?

  • Q : Calculate present value of expected

    When valuing the shares of my company, I calculate the present value of the expected cash flows to shareholders moreover I add to the result obtained cash holdings and liquid investment. Is that correct?

  • Q : Who explained market-neutral delta

    Who explained market-neutral delta hedging?

  • Q : Compute betas against local indexes

    Does it make any sense to compute betas against local indexes while a company has a great part of its operations outside such local market? I have two illustrations: BBVA and Santander.

  • Q : Explain exotic option-value of option

    Explain exotic option’s value of option pricing method.

  • Q : Define capital goods Capital goods :

    Capital goods: Goods employed in producing other goods are termed as capital goods.

  • Q : How WACC should be computed to begin a

    I cannot seem to begin a valuation. In order to compute E + D = VA (FCF; WACC) I require the WACC and to compute the WACC I need D and E. Where must I start?