Beruflich Dokumente
Kultur Dokumente
VALUATIONS
Group 3
WHAT IS BONDS?
Long term debt instrument in which a borrower
agrees to make payments of principal and interest,
on specific dates, to the holders of the bond.
Issued by corporations & government agencies that
are looking for long term debt capital.
FOUR MAIN ISSUER OF BONDS
Treasury Bonds - also known as government bonds,
issued by the government.
- no default risk (credit risk)
Corporate Bonds - issued by business firms.
- exposed to default risk
Municipal Bonds - the term given to bonds issued
by state and local governments.
- exposed to some default risk
Foreign Bonds - issued by foreign government or a
foreign corporation.
- exposed to default risk.
KEY CHARACTERISTICS OF BONDS