9Chapter 3 Bond_Prices

9Chapter 3 Bond_Prices - Bond Prices Readings: Zagorsky...

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Click to edit Master subtitle style 4/18/11 Bond Prices Readings: Zagorsky Chapter 3
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4/18/11 Introduction Bonds are a key part of financial markets Bond market is roughly twice the size of the stock market. Bank International Settlements estimates world bond market over $80 trillion.
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4/18/11 Introduction How and why do macroeconomic events cause bond prices to go up and down? Honest Answer: No one really knows. Bonds are related to interest rates. But there is no perfect model for predicting exactly how
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4/18/11 Basic Ideas About Bonds A bond is a certificate of indebtedness. Specifies obligations of the borrower to bond holder. In the past bonds were actual pieces of paper, like the one pictured above. Today most bonds are entries in computers and the actual pieces of
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Few Simple Ideas A company, government or organization that needs to borrow money issue actual or virtual certificates at par. For the most common bonds par is usually $1,000 per bond.
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9Chapter 3 Bond_Prices - Bond Prices Readings: Zagorsky...

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