Bonds: Money raised by govt, state govt, corporate from investors at a given interest

rate
100-face value,10% coupon rate, 27-Nov,2020 coupon date

Yield is what money you get once the bond is listed on the secondary market
BOND ISSUANCE: IPO and Private placement

MONEY MARKET INSTRUMENTS:

Factors affecting bond prices:
Credit Ratings

Interest rates: inverse relation

Inflation: inverse relation

Crude oil price: crude oil goes up, inflation goes up too. Inverse relation (India specific)

Exchange rate:
As the rate of one currency increases relative to another, investors are attracted to the
higher yielding currency. Additionally, the cost of owning the lower
yielding currency increase as the bond yield differential moves in favor of
the currency that is sold.

If we buy brazil bonds, and Brazilian currency improves vs INR, we will make more
interest income. Direct gain. Brazilian binds will become more attractive

Performance of business sector

Debenture:
Debentures are issued by private/public companies for raising capital from the
investors. Bonds are backed by the asset of the issuer whereas debentures are not
secured by any of the physical assets or collateral. Debentures are issued and
purchased only on the creditworthiness and reputation of the issuing party.

Convertible debenture can be converted to equity

PAR MODEL:
P:PURPOSE:

Regular income, tax free income, save tax on capital gains, pledge for options trading

A: AMOUNT OF MONEY

R: Risk appetite