You have been asked to write a training document about the US Bond Market for use in the new employee-training program. In your document, you must make sure to address each of the following:
1a: The key players in the market; and the types of investments available to both individual investors and institutional investors,
Bond Characteristics
A bond is a "security" which gives the holder a financial claim on the issuer. This claim protects the holder in circumstances in which the issuer is unable to pay the amount due. It is made formal by the "trust indenture", a legal document, which specifies all of the bond's features and the legal rights and obligations of all the parties to the agreement (http://www.finpipe.com/bndchar.htm).
The bond market and bonds investments offer investor's (both individual and corporate) dependable income, relative safety and portfolio diversification. Because bonds typically have a predictable stream of payments and repayment of principal, many people invest in them to preserve and grow capital or to receive consistent interest income (http://www.globaldirectsvcs.com/Bond_Trading.html).
Key Players
Specifically, a bond (a fixed interest financial asset) is issued by governments, companies, banks, public utilities and other large entities and traded/bought by investors (individuals and/or corporations) http://economics.about.com/cs/economicsglossary/g/bond.htm. Thus, these are the key players, both the issuers and the buyers alike.
Types of Bonds and how they are transacted:
Bonds have many characteristics such as the way they pay their interest, the market they are issued in, the currency they are payable in, protective features and their legal status. Bond issuers may be governments, corporation ...