debt_market

May 19th, 2015
Studypool Tutor
Abilene Christian University
Price: $25 USD

Tutor description

Types of instruments traded in the debt market

Word Count: 793
Showing Page: 1/10
Types of instrumentstraded in the debtmarketThe debtMarketsegmentsGovt. securitiesmarketPublic sector bondsCoupon bearing bondsZero coupon bondsTreasury billsFloating rate bondsGovt. guaranteed bondsDebenturesPSU bondsCommercial papersDeep discount bondsPrivate sector bondsDebenturesCommercial papersFloating rate bondsZero coupon bondsCertificate of depositsZero coupon bonds: Also known as zero interest bonds. They are sold ata discount from their face value. The difference between the face valueand the acquisition cost is the gain/return to the investor. For example: abond of the face value of Rs 1000 may be sold at discounted value of Rs300 and repayable at its face value of Rs 1000 after 6 years. Thus thedifference between the face value and discounted value is the interest forthat period.Deep discount bonds: these are also of the nature of zero coupon bonds.They are issued at a heavy discount and are repayable at face value. Atpresent these are issued by the public financial institutions like IDBI andSIDBI etc.For example in 1992, IDBI issued deep discount bond at Rs 2700 whichwas payable after 25 years at the face value of Rs 1,00,000.Treasury bills: A treasury bill is a promissory note issuedby the Government for a specified period, usually for theyear. The govt. promises to pay the amount, mentioned inthe treasury bill, to the bearer of the instrument on the duedate. Treasury bills are issued

Review from student

Studypool Student
" Top quality work from this guy! I'll be back! "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1822 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors