Bond Market

The bond market is a financial market that acts as a platform for the buying and
selling of debt securities. The bond market is a part of the capital market serving
platform to collect fund for the public sector companies, governments, and
corporations. There are a number of bond indices that reflect the performance of a
bond market.

The bond market can also b called the debt debt market, credit market, or fixed income market.
The size of the current international bond market is estimated to be $45 trillion.
The major bond market participants are: governments, institutional investors, traders, and
individual investors. According to the specifications given by the Bond Market Association, there
are five types of bond markets. They are:

Corporate Bond Market

Municipal Bond Market

Government and Agency Bond Market

Funding Bond Market

Mortgage Backed and Collateralized Debt Obligation Bond Market

The bonds are usually specific to individual issues and there is a lack of liquidity in
the bonds. This is the reason that most of the bonds are held by institutions like
banks, mutual funds, and pension funds. Bond markets are generally decentralized,
and unlike stocks and futures, there exists no common exchange for the bond
market.
The bond market is less volatile in nature than the stock market, and thus investors
purchase the bond coupon and holds it until it matures. As risk associated with bond
investment is less, the return received is also less.
Primary Market
Primary Market, also called the New Issue Market, is the market for issuing new
securities. The main players of these markets are the private and public companies
that offer equity or debt based securities such as stocks and bonds in order to raise
money for their operations such as business expansion, modernization and so on.
They sell their securities to the public through an Initial Public Offering (IPO). The
securities can be directly bought from the shareholders, which is not the case for

the secondary market. The primary market is a market for new capital that will be
traded over a longer period. Here the securities are issued on an exchange basis.
A primary market is not inclusive of sources, from where companies can generate
external finance over a long term, such as loans provided by financial organizations.
Through these markets, companies can also go public, which means changing
private capital to public capital.
Many companies have entered the primary market to earn profit by converting their
capital, which is basically a private capital, into a public one, releasing securities to
the public. This phenomena is known as "public issue" or "going public".
Secondary Market
Secondary Market is the market where, unlike the primary market, an investor
can buy a security directly from another investor in lieu of the issuer. It is also
referred as "after market". The securities initially are issued in the primary market,
and then they enter into the secondary market.
All the securities are first created in the primary market and then, they enter into
the secondary market. In the New York Stock Exchange, all the stocks belong to the
secondary market.In other words, secondary market is a place where any type of
used goods are available.
In the secondary market, shares are maneuvered from one investor to other, that is,
one investor buys an asset from another investor instead of an issuing corporation.
So, the secondary market should be liquid.
Example of Secondary Market:
In New York Stock Exchange, in the United States of America, all the securities
belong to the secondary market.
Exchange Rate
The History of exchange rate simply describes the procedure and medium of
exchange of money among people in ancient time. From the early period of time,
people realized the requirement of maintaining a uniform and consistent medium of
exchange.
The early people did not have any central monetary authority, nor they had any
concrete monetary policy to exchange money between each other. Nevertheless
they successfully able to operate monetary transaction between each other.
Stock Market

Investors and security issuers both participate in stock markets. Different sized
entities participate in stock market activities, ranging from small investors to the
governments, corporations, large hedge fund traders, and banks. Corporations,
governments, and companies issue securities on the stock market to collect funds.
The stock market acts as a platform for companies to raise money for their business
and investors to invest in securities.When both the buyers and sellers in stock
markets are institutions, rather than individuals, the stock market principle is more
institutionalized. The emergence of this institutional investor concept has brought
some improvements to stock market operations around the world.
Stock markets can exist in both real and virtual arenas. Stock exchanges with
physical locations carry out stock trading on trading floor. This method of
conducting trading, where the traders enter verbal bids, is called open outcry.
In virtual stock exchanges, trading is done online by traders who are connected to
each other by a network of computers.In addition to acting as a market place for
stock trading, stock markets also act as the clearinghouse for stock transactions.
Bull and Bear Market
Abstract:
In finance, a bear market is a market condition that occurs when the prices of
shares decline or are about to decline. Figures may vary, but if prices decrease by
15 to 20% then the market is assumed as a bear market.Some multiple indexes,
such as Standard & Poor's 500 Index (S&P 500) and the Dow Jones, are used to
define a bear market.
The term "bear" has been used in finance since the early 18th century. One of the
most well-known bear markets in the history of the US was the Great Depression
during the 1930s.We will, however, be focusing here on trading in a bear market. As
mentioned, the term bear market signifies a period in which investment prices
decrease.
However, if the period of declining prices is not long and is immediately followed by
a period where stock prices are on the increase, the trend is no longer considered as
a bear market but labeled, in financial terms, as a correction.In general, a bear
market resumes if the government goes into recession and if the inflation rate is
high.Trading in a bear market is extremely difficult and risky for shareholders.
In the stock market, investors who usually attempt to make a profit from a price fall
are known as bears.
They are normally pessimistic about the given market condition. "Bearish" thoughts
may be applied to several kinds of markets like commodity markets, bond markets,
and stock markets.

On the other hand, investors who think that a particular share or market is going
downward are termed pigs.
The stock market of several developed countries, the United States, for instance,
has been fluctuating, since the bears as well as their counterparts known as the
bulls, are fighting with each other to take control.
The stock market of US has increased only by 11% annually during the last 100
years. This shows that every single bear has incurred a loss.
Dividend
A dividend refers to a payment, which a company pays to its shareholders. Payment
of dividends is not an expense for a company; it is a distribution of assets among
the shareholders.When a company earns a profit, it has two options for
implementing it.
They are the following:
Re-investment of the profit into business operations, which is also known as
retained earnings.
Paying dividends to the shareholders of the company
A large number of companies keep aside a part of the profits earned by them, the
remainder distributed as dividends. They are dispersed in cash, most commonly, or
in the form of stocks and shares.
Dividends come in multiple forms:

Cash

Property

Stock

Other forms

Earnings Per Share

The concept of earnings per share is required in share market operations.
Companies issue shares to garner resources from the market. Investors rely on
several financial market parameters to determine the shares that would be
purchased. Earnings Per Share is one such ratio. It is used for the purpose of
evaluating the prices of the shares.

More about the Concept of Earnings Per Share

Earnings Per Share is a statistical measure. It is calculated using the following
formula,
Earnings Per Share= Net income/Number of outstanding shares
Earnings Per Share relates income with ownership. It is a per share concept.
Earnings per share is also referred to as EPS. One look at a company's EPS records
gives an idea of its growth in earnings over the years.
So a comparison can be made between the company's earnings and its dividend
payouts. Information about the prevalent share price of each year can also be
obtained from the earnings per share statistics.