week 2 - the bond market Flashcards by Bryce Whitten | Brainscape

Q

who are the 2 main issuers in the bond market?

A

government and corporate

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Q

what are the characteristics of a treasury bond?

A

Auctioned through AOFM
- Medium to long term
- Fixed annual interest rate, paid semi-annually
- Traded on the YTM basis
- Price is calculated by inputting the yield into the appropriate
  pricing formula

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Q

what does an A graded corporate bond indicate? what about a (BBB) rated bond?

A

Investment grades (A) indicates lower risk
- Speculative rate (BBB)

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