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The opening up of the financial market at present has influenced several foreign investors holding up to 30% of the financial in form of fixed income to invest in the bond market in India. A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federal government, states, cities, corporations and many other types of institutions sell bonds is a promise to repay the principal along with interest (coupons) on a specified date (maturity). A bond is a part of fixed income investments Its a promise to repay a sum of money at a certain interest rate and over a certain period of time.
Features of the bond : Maturity of bond refers to the date on which the bond matures, or the date on which the borrower has agreed to repay the principal amount to the leader. Coupon rate is the rate at which interest is paid , and is usually represented as a percentage of the par value of a bond.
Principal is the amount that has been borrowed, and is also called the par value or face value of the bond.
Types of Bonds
Government bonds Convertible bonds Corporate bonds Zero coupon bond Foreign currency bonds PSU bonds Bond on Tap Various schemes of bond offered by industry
Regulatory framework
SEBI Act,1992 The companies act,1956 The securities contracts act,1956 The deposit act,1996