The value of a bond, as of any financial asset, is the present value of the cash flows that are expected to be generated by the bond.
The Fed's recent monetary policy has driven up the price of long-term government debt to very high levels. The corresponding extremely low interest rates are part of the government's efforts to breathe some life into the economy. However, if the Fed succeeds and the economy recovers, long term interest rates will have to increase drastically to keep inflation in check. This will cause a dramatic decline in bond prices. It is safe to say that a bubble has formed in long-term government debt.
the Government of india has framed Special Economic Zone (“SEZ”) Policy to remove shortcomings of EPZ, create world-class infrastructure and provide a stable fiscal regime to attract larger foreign investments in India. A large number of incentives and facilities have been offered to the units in SEZs for attracting investments into the SEZs. This article analysis the benefits and incentives.
The gravest fear than death is to lose money. When one loses money, he loses all hopes and begin to hate himself. The very first rule of investment is "Never hate yourself. You are your best friend and also worst enemy". The author, a practical expert with 36 years of combined experience as Banker, stock Broker, Bond trader and Convertible bond specialist, always solved problems of his customers in Hong Kong. The enclosed article is applicable to all markets. Only players change, method same...
A convertible bond is a complex derivative, it is difficult to price due to its embedded multiple features including equity and fixed income characteristics, conversion, callability, etc. To accurately evaluate it requires a model taking all these features into account, which is time-consuming and prone to error.
Debentures are loans, secured by a corporation, municipality or government. Bonds and debentures are instruments that provide for a maturity at which time the principal will be repaid. In addition to the payback of principal, the borrower will pay interest at stated intervals, usually semi-annually.
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