BFC2340 Study Guide - Final Guide: Libor, Reference Rate, United States Treasury Security
8 Aug 2018
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Week 1 - intro to the bond market, bonds & Bond investors include retail investors and institutional investors. Retail investors are individuals who invest on their own behalf. Since there is a high minimum investment for bond market, retail investors are less common in the bond market. Advantages of retail investors investing in pooled funds; Better liquidity = it is easy to sell into and out of bonds. Professional management = the institutional investors who manage the pooled funds. Institutional investors are those who invest other people"s money for them. have expertise in what they are doing. The date that the issuer will redeem the bond by paying the holder its principal. There may be provisions in the bond"s indenture (contract) that allows either the issuer or bondholder to alter the bond"s term to maturity. Principal value = the amount that the issuer agrees to repay the bondholder at maturity date.
