Employee Training Document: US Bond Market Factors

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PLEASE SEE RESPONSE ATTACHED FOR BETTER FORMATING, WHICH IS ALSO PRESENTED BELOW. I HOPE THIS HELPS AND TAKE CARE.

RESPONSE:

It is important for you to know that BrainMass (and you might already know this) does not write essays or complete assignments for students. It is my job to provide information, guidance, and direction so you will be in a better position to complete your own assignment. Thus, I will address each of the questions below and provide links for further research, and you can then use the information for your final copy of your training document. Let?s take a closer look.

You have been asked to write a training document about the US Bond Market for use in the new employee-training program. In your document, you must make sure to address each of the following:

1a: The key players in the market; and the types of investments available to both individual investors and institutional investors.

Bond Characteristics

A bond is a "security" which gives the holder a financial claim on the issuer. This claim protects the holder in circumstances in which the issuer is unable to pay the amount due. It is made formal by the "trust indenture", a legal document, which specifies all of the bond's features and the legal rights and obligations of all the parties to the agreement (http://www.finpipe.com/bndchar.htm).

The bond market and bonds investments offer investor?s (both individual and corporate) dependable income, relative safety and portfolio diversification. Because bonds typically have a predictable stream of payments and repayment of principal, many people invest in them to preserve and grow capital or to receive consistent interest income (http://www.globaldirectsvcs.com/Bond_Trading.html).

Key Players

Specifically, a bond (a fixed interest financial asset) is issued by governments, companies, banks, public utilities and other large entities and traded/bought by investors (individuals and/or corporations) http://economics.about.com/cs/economicsglossary/g/bond.htm. Thus, these are the key players, both the issuers and the buyers alike.

Types of Bonds and how they are transacted:

Bonds have many characteristics such as the way they pay their interest, the market they are issued in, the currency they are payable in, protective features and their legal status. Bond issuers may be governments, corporations, special purpose trusts or even non-profit organizations. Usually it is the type of issuer or the particular nature of a bond that sets it ...