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In finance, a bond is a type of security under which the issuer owes the holder a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time. [1])
Bonds below Baa/BBB (Moody's/S&P) are considered junk or high-risk bonds. Their high risk of default (approximately 1.6 percent for Ba) is compensated by higher interest payments. Bad Debt is a loan that can not (partially or fully) be repaid by the debtor. The debtor is said to default on their debt. These types of debt are frequently ...
The coupon (of a bond) is the annual interest that the issuer must pay, expressed as a percentage of the principal. The maturity is the end of the bond, the date that the issuer must return the principal. The issue is another term for the bond itself. The indenture, in some cases, is the contract that states all of the terms of the bond.
For example, long-term government bonds like U.S. Treasurys are known to provide steady income and hold up during economic downturns, while corporate bonds are sometimes favored during periods of ...
Welfare economics is a branch of economics that uses microeconomic techniques to evaluate economic well-being, especially relative to competitive general equilibrium, with a focus on economic efficiency and income distribution. [13] In general usage, including by economists outside the above context, welfare refers to a form of transfer payment ...
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
Monetary policy — specifically, actions by the Fed to tame inflation or stimulate economic growth — has a direct influence on interest rates and, therefore, bond prices. When interest rates ...
Bond issued by The Baltimore and Ohio Railroad. Bonds are a form of borrowing used by corporations to finance their operations. Share certificate dated 1913 issued by the Radium Hill Company NYSE's stock exchange traders floor c 1960, before the introduction of electronic readouts and computer screens Chicago Board of Trade Corn Futures market, 1993 Oil traders, Houston, 2009