Corporate Bonds: Description and Characteristics

Global finance
institutions & Markets

Table of Contents
INTRODUCTION...........................................................................................................................4
QUESTION 1...................................................................................................................................4
A. Government intervention in financial market with suitable examples:..................................4
b. Effects of a stimulative monetary policy:................................................................................5
REFERENCES................................................................................................................................6
QUESTION 2...................................................................................................................................7
A. Discussion on Money markets enable financial market participants to maintain liquidity:...7
REFERENCES................................................................................................................................7
QUESTION3....................................................................................................................................8
A. Bonds:.....................................................................................................................................8
B. Institutional participation in bond markets:............................................................................8
C. Bond yields:.............................................................................................................................9
D. Treasury and federal agency bonds:........................................................................................9
E. Municipal bonds:.....................................................................................................................9
REFERENCES................................................................................................................................9
QUESTION 4.................................................................................................................................11
A. Describe corporate bonds:.....................................................................................................11
B. description of the characteristics of corporate bonds:..........................................................11
C. how corporate bonds finance restructuring:.........................................................................11
REFERENCES..............................................................................................................................12
QUESTION 5.................................................................................................................................13
A. Methods of valuation of stock exchange:.............................................................................13
B. measure the excess return above the risk-free rate per unit of risk (Sharpe Index):.............13
REFERENCES..............................................................................................................................14
QUESTION 6.................................................................................................................................15
A. Initial public offerings...........................................................................................................15
B. Process of going public.........................................................................................................15
C. Underwriter efforts to ensure price stability.........................................................................15
D. Initial returns of IPOs............................................................................................................15

E. Abuses in the IPO market......................................................................................................16
REFERENCES..............................................................................................................................16
CONCLUSION..............................................................................................................................17

INTRODUCTION
Financial institution is the company which is dealing in financial and monetary terms
such as transactions deposits, loans, investments and currency exchange. It contains a broad
range of business operations with financial service industries such as banks, non banking
companies, trust, insurance, brokerage and investment dealers. It is the intermediary between
consumers and the capital providing by banks and investment services. It is responsible for the
supply of money in the market through transfer of funds from the investors to the companies by
loans, deposits and investments. Global financial market includes the market that is deal in
foreign exchange and related to money markets. This report covers topics such as government
intervention in financial markets, stimulative monetary policy, money market, facilities provided
by bond market and corporate bonds. Apart from this it also covers topics such as stock
exchange and valuation of stocks, risk and return and IPOs.
QUESTION 1
A. Government intervention in financial market with suitable examples:
Financial market refers to which deals in financial assets such as shares, debentures and
bonds in terms of buy and sell it. Funds are transfer in financial market when one party buy
financial assets which is previously held by another party.
Role of financial markets:
 Financial market provides funds from investors to those who need for it.
 It helps corporates in order to fulfill their financial needs that can be, the market is
mediator between corporates and investors for fund management.
 It allows investors to expand their business as well as investors to achieve higher return.
 It helps in investment management activity and corporate finance activity.
Government intervention in financial markets: In recent years, government has
increased its role in financial markets. The government is influencing all aspects of the financial
institutions. Government rules and policies make impacts on overall economy that directly
affects the financial market and institutions. Government rules may affects financial activities of
any business. The impact can be done by government laws, tax policies, central bank activities
and accounting standards (Collingro and Frenkel, 2020).