Questions from Financial Markets

Q: A bond provides information about its par value, coupon interest rate

A bond provides information about its par value, coupon interest rate, and maturity date. Define each of these.

Q: As interest rates in the market change over time, the market

As interest rates in the market change over time, the market price of bonds rises and falls. The change in the value of bonds due to changes in interest rates is a risk incurred by bond investors. Wha...

Q: In addition to Treasury securities, some agencies of the government issue

In addition to Treasury securities, some agencies of the government issue bonds. List three such agencies, and state what the funds raised by the bond issues are used for.

Q: A call provision on a bond allows the issuer to redeem the

A call provision on a bond allows the issuer to redeem the bond at will. Investors do not like call provisions and so require higher interest on callable bonds. Why do issuers continue to issue callab...

Q: What is the document called that lists the terms of a bond

What is the document called that lists the terms of a bond?

Q: Contrast investors’ use of capital markets with their use of money markets

Contrast investors’ use of capital markets with their use of money markets.

Q: What are the primary capital market securities, and who are the

What are the primary capital market securities, and who are the primary purchasers of these securities?

Q: Distinguish between the primary market and the secondary market for securities.

Distinguish between the primary market and the secondary market for securities.

Q: Why is a share of Microsoft common stock an asset for its

Why is a share of Microsoft common stock an asset for its owner and a liability for Microsoft?

Q: The U.S. Treasury issues bills, notes, and

The U.S. Treasury issues bills, notes, and bonds. How do these three securities differ?