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t-bills are issued to enable the government to tide over short-term liquidity requirements with maturities varying from a fortnight to a
just as any other financial market money market also involves transfer of funds in exchange for financial assets because of the nature of
generally an interest rate or an interest rate index is used as a reference rate for however through financial engineering issuers have
extendible reset bonds are floaters in which the issuer is required to reset the coupon rate so that the issue will trade at a
stepped spread floaters have a provision to change the quoted margin at certain intervals over a floaters life the quoted margin could
floaters that can be classified under this head are1 stepped spread floaters2 extendible reset
the coupon rate of these types of bonds is adjusted periodically at a fixed margin over a reference rate it can be adjusted southward
in dual indexed floaters the coupon rate is a fixed rate plus the difference between two reference rates purchasers of these securities
normally floater coupon rate moves in the same direction as the reference rate that is with an increase in the reference rate the floater
a floater where the coupon rate is computed as a fraction of the reference rate plus a quoted margin are known as a de-leveraged floater
let us look into few floaters that have constant quoted margin1 de-leveraged floaters2 inverse floaters3 dual-indexed
floating rate securities can be broadly divided into following two partsfloating-rate securities that have constant quoted
these were first issued during a period of extreme interest rate volatility in the late 1970s floating-rate bonds which are also known
these are bonds which are offered within the euro market and several other markets simultaneously unlike eurobonds global bonds can be
the term eurobonds refers to bonds issued and sold outside the home country of the currency for example a dollar denominated bond issued
they are issued in the local market by a foreign borrower are usually denominated in the local currency for example yankee
they are issued in the local market by a domestic borrower and are usually denominated in the local currency for example us companies
various other types of bonds are-1 domestic bonds2 foreign bonds3 euro bonds 4 global bonds5 floating
in the case of dual currency bonds the interest is paid in one currency while the principal repayment is made in
deferred coupon bonds are generally issued at a discount price and are used for financing leveraged buyouts the coupon
these types of securities have more than one coupon rate and each subsequent coupon rate is higher or lower than the previous
all the bonds are not making periodic coupon paymentszero-coupon bonds are those bonds where the bondholder realizes interest by buying it at a
putable bonds can be redeemed prior to maturity at the initiative of the bondholder these bonds are more advantageous to the investors as they