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maturity profileeven though there is no ideal theoryconcept of the maturity of the instruments some important issues that should be considered while
auction techniqueauction is the most common method to sell government securities other methods include tap sales syndication and book building
relevance of development of money marketthe development of the money market is important for the debt market especially through the process of
need to widen and deepen the government securities marketthe importance of the government securities markets can be evaluated from three angles as
prices and yieldsthe face value of the government security is rs100 or rs1000 earlier that is before 1950s the government bonds were issued at a
volume of issues of central and state government securitiesthe growth of government securities market in india and the investor response to the
stock on tapmost of the players who invest in these securities are institutions and hence the volumes are high considering that these securities are
types of government stocksissue of stock through auctionthe rbi on behalf of the government issues notification to auction government securities
advantages and disadvantages of investing in giltsadvantagesas the security is issued by the goi it has a minimal default riskinvestors have the
yieldyield represents the actual return on the investments different types of yield are discussed belowcoupon yield the fixed interest rate on a
features of government securitiesissuersthe government securities are issued by the central government state governments and semi-government
a callable bond is the sale of a call option by the investor to the issuer as it allows the issuer to repurchase the bond from the time
the formula explained in the above paragraph enables the investor to compute the value of a bond with an embedded option as the
the volatility assumption has a great influence on the arbitrage free value of the bond the higher the expected volatility the greater
the effective maturity of a callable bond can be anywhere between the first call date and its maturity date due to the
dow jones global index djgithe djgi aims to cover 95 of market capitalisation at country level as with ftse and msci there are the same 23 developed
global equity indexesas described earlier in this chapter there are several stock market indexes available which depict the performance of particular
sampp cnx 500here the stocks are included as per their respective market capitalization it includes companies which lead in their respective industry
otcei-composite indexthe otcei index is a pure price index the sum of the prices of all shares as of june 1993 is in the denominator the current
specialized stock indexesthe most regularly quoted market indices are those that include the stocks of the largest listed companies on a nations
bse-500 and sectoral indiceson august 9 1999 another new index was introduced in the market which was based on the data of 500 companies and
bond valuation would be relatively simple if interest rates exhibit little day-to-day volatility one could value a bond by discounting
stock market indicatorsstock indices can be organized by weighting the sample of stocks the stock indicators can be of four types price-weighted
it is not easy to determine the theoretical value of non-treasury securities however we can use the treasury spot rate for the valuation
short sales short sales of a security means borrowing of an underlying security by an investor from other investors who are holding it in