Bonds Flashcards
define bonds
type of investment where investors lend money to Uk govt in return receiving interest at regular intervals
why can bonds fluctuate
due to changing interest rates
what are bonds used to help
finance public spending
what is the primary bond market
where the govt issues bonds
what is the secondary bond market
if a bond horder needs their money back before the maturity date they resell the bonds
what is the correlation between bond prices and yield
inverse, as bond price decreases bond yield increases
whats a debenture
a business bond
where is the majority of HMF held
banking systems
explain an additional expansionary policy
BOE can buy back bonds before the maturity date adding liquidity to the banking system making it easier for people to borrow increasing AD
define bond yield
rate of interest paid on govt debt
